Introduction 1 About This Book 1 Foolish Assumptions 2 Icons Used in This Book 3 Beyond the Book 4 Where to Go from Here 4 Part 1: So You Want To Be A Landlord? 5 Chapter 1: Residential Property Management 101 7 Understanding Property Management 8 Considering the benefits 8 Confronting the icky parts 9 Examining Types of Real Estate 11 Renting Your Property 12 Preparing the property 12 Knowing how much to charge 13 Capturing prospects'' interest 14 Turning interest into property visits 15 Picking your tenants and signing the deal 15 Getting Your Hands Dirty: Managing the Property 16 Moving tenants in and out 16 Collecting rent 16 Keeping the good tenants 17 Dealing with troublesome tenants 17 Maintaining the property 18 Protecting your investment 18 Chapter 2: Do You Have What It Takes to Manage Your Own Rental Property? 19 Understanding That Managing Residential Rental Property Is a People Business 20 Identifying the Types of Real Estate Owners 20 The inadvertent rental property owner 21 The buy, fix, and flip or refinance owner 21 The long-term investment rental property owner 22 Recognizing the Advantages of Owning Rental Property 24 Eyeing the Unique Characteristics of a Good Manager 26 Realizing that good management makes a difference 27 Separating your personal style from sound management 27 Managing your time 28 Delegating management activities 29 Knowing that your style is unique 30 Being Honest with Yourself about Your Skills and Experience 31 Chapter 3: Managing Your Residential Property Yourself or Hiring a Pro 35 Managing Your Rental Yourself 36 The advantages 36 The drawbacks 37 The distance factor 38 Exploring Professional Management 38 Eyeing the pros and cons of using a pro 39 Understanding what a good property manager does 41 Telling the good from the bad 42 Compensating your property manager 46 Making sense of management agreements 48 Being aware of the tax consequences 50 Chapter 4: Taking Over the Property 53 Knowing What to Get Up Front 54 A comprehensive list of personal property included in the sale 55 A copy of the entire tenant file of each current tenant 55 A seller-verified rent roll and list of all tenant security deposits 56 A copy of all required governmental licenses and permits 57 A copy of all the latest utility bills 57 A copy of every service agreement or contract 58 A copy of the current insurance policy and loss history 58 Working with the Current Tenants During the Transition 60 Meeting the tenants in person 60 Inspecting the property 61 Inspecting the rental unit 61 Using a new lease or rental agreement 62 Evaluating the current rent 63 Part 2: Renting Your Property 65 Chapter 5: Getting Your Residential Rental Property Ready for Prospective Tenants 67 Viewing Your Rental Property from a Prospective Tenant''s Shoes 68 Paying attention to the exterior and common areas 68 Making sure that the interior is up to snuff 69 Preparing Your Rental Unit the Right Way 73 General cleaning 74 Maintenance 74 Painting 80 Final cleaning 82 Carpet or floor-covering cleaning 83 Using Outside Contractors 84 Chapter 6: The Big Three of Property Management: Rent, Security Deposits, and Rental Contracts 85 Setting the Rent 86 Examining the return on your investment 86 Conducting a market analysis of rents in your area 88 Coming Up with a Fair Security Deposit 94 Figuring what you can legally charge 95 Keeping security deposits separate from your other funds 96 Avoiding nonrefundable deposits 97 Paying interest on security deposits 98 Increasing (or decreasing) deposits 99 Considering security deposit alternatives 99 Choosing the Type of Rental Contract You Want 101 Contemplating a lease 101 Eyeing a periodic rental agreement 102 Getting your contract in writing 104 Chapter 7: Formulating a Marketing Plan 107 Developing a Successful Marketing Plan 107 Determining your target market 108 Thinking about what your renters stand to gain from your property 109 Understanding the Importance of Good Advertising 110 Eyeing the different approaches 111 Knowing which approach gives you the most bang for your buck 112 Getting your property to rent itself 113 Being Aware of Fair-Housing Laws 114 Chapter 8: For Rent: Effectively Using Advertising to Generate Interest 117 Analyzing Your Advertising Options 118 Talking the talk: Word-of-mouth referrals 118 Showcasing your site: Property signs 120 Broadening your horizons: The Internet 122 Reading all about it: Newspapers 129 Papering the neighborhood: Flyers 134 Creating chat: Community bulletin boards 136 Going where the jobs are: Local employers 137 Meandering through other tactics to try 138 Chapter 9: Handling Prospects When They Come A-Calling 141 Understanding Why First Impressions Are Important 142 Standing out from the crowd 142 Being professional and well organized 143 Valuing Phone Conversations 146 Preparing for Rental Inquiry Phone Calls 148 Being prepared with basic phone techniques 148 Answering the phone 153 Providing and obtaining the basic info 155 Selling the prospect on your property 157 Prequalifying the prospect over the phone 158 Handling phone objections 160 Converting phone calls to rental showings 162 Planning for Open Houses and Walk-Throughs 163 Holding an open house 164 Scheduling individual appointments 165 Providing directions to the property 165 Chapter 10: Strutting Your Stuff: Making Your Property Memorable 167 Showing Your Rental Unit 167 Showing a vacant rental 168 Showing an occupied rental 170 Taking the First Steps to Get the Renter Interested 171 Prequalifying your prospect during the rental showing 172 Resolving your prospect''s objections 173 Convincing your prospect 173 Inviting your prospect to sign on 174 Having your prospect complete a rental application 175 Holding your prospect''s deposit 176 Developing priority waiting lists 177 Handling Mandatory Disclosures and Environmental Issues 178 Lead-based paint 179 Asbestos 181 Radon 185 Sexual offenders 187 Chapter 11: Eenie, Meenie, Miney, Mo: Selecting Your Tenants 189 Understanding the Importance of Screening 190 Establishing Tenant Selection Criteria 191 Why having criteria is important 191 How to create your criteria 192 Verifying Rental Applications 194 Confirming identity 194 Going over occupancy guidelines 195 Investigating rental history 196 Validating income sources 197 Reviewing credit history 199 Checking criminal history 203 Talking with all personal references 205 Dealing with cosigners 205 Making your final decision 206 Notifying the Applicant of Your Decision 208 Avoiding Housing Discrimination Complaints 209 The ins and outs of fair housing 210 Steering and chilling 212 Children 213 Reasonable accommodations 214 Reasonable modifications 215 Companion or service animals 216 Americans with Disabilities Act 217 Sexual harassment 218 Part 3: The Brass Tacks Of Managing Rentals 219 Chapter 12: Moving In the Tenants 221 Establishing the Move-In Date 222 Meeting with a Tenant Before Move-In 223 Covering the rules with your new tenant 223 Reviewing and signing documents 226 Collecting the money from your tenant 232 Inspecting the property with your tenant 233 Giving your tenant an informational letter 237 Distributing the keys to your tenant 239 Setting Up the Tenant File 241 Preparing a Welcome Package for Your New Tenant 242 Chapter 13: Collecting and Increasing Rent 243 Creating a Written Rent Collection Policy 244 When rent is due 244 Where rent is paid 247 How rent is paid 248 Dealing with Rent Collection Problems 251 Collecting late rent 251 Charging late fees 253 Handling returned rent payments 255 Dealing with partial rent payments 256 Serving legal notices 257 Raising the Rent without Sending Your Tenants Running 258 Figuring out how to raise the rent 258 Keeping your tenants (relatively) happy 259 Chapter 14: Keeping the Good Tenants (And Your Sanity) 261 Knowing What Tenants Want 262 Timely and effective communication 263 Quick responses to maintenance requests 263 Consistent respect for privacy 264 Equal enforcement of house rules 265 Fair rental rates and increases 265 Recognizing the Ins and Outs of Renewing Leases 266 Reducing your turnover 266 Offering incentives for tenants to stay 270 Following up with tenants after move-out 272 Chapter 15: Dealing with Problem Tenants 273