First, you must be able to estimate the rent of a particular property with some certainty.  It is not enough to guess the rent just based on what nearby rentals are going for.   Of course, you need to use that as your guide.  You must also be able to compare the subject property (your contemplated purchase or the one you currently own) to the market after taking into account the interior floor plan and condition.  The floor plan of a home is very important and should not be underestimated. Does the house have an appealing setup?  Is there a logical way to get to the backyard?  Is the patio set up to make the yard a pleasant place that will get used?  What is the condition of the carpet, walls, and bathroom?  Is the kitchen appealing?  All of these items impact how much rent you will be able to garner.  Using online rent surveys and online listings and combining that information with the subject property will help you in evaluating a property for purchase, setting rents when vacant, and determining rent increase amounts.

Second, you must know how to screen prospective residents.  You must have a way to obtain credit reports and run them on every adult applicant.  Teach yourself to interpret the reports.  They contain information such as last know addresses in addition to pay history and rating.  Screening also involves knowing how to detect fake landlord references and falsified employment documents.  Desperate applicants will take desperate measures to get into your home.  This is the key to success in owning rental property.  It is also the reason some landlords fail.  They do not learn this essential skill.

Third, you should be evicting late or non payers sooner rather than later.  Too many landlords listen to the stories of their delinquent tenants and let them slide for two or three months.  The old adage is, “You mother carried you for nine months, but I will only carry you for one”.  When the rent is late, follow up immediately.  If you are not successful in contacting the resident by phone, go to the property with a 3 Day Notice and serve it.  They may have skipped out and this action will answer that question.  Once the notice expires you should move forward with the eviction unless that tenant has given you some real hope in the form of a partial payment or a promise to pay in just a few days.  Remember, if your tenant cannot afford one month, they for sure cannot afford two.

Fourth, do not let tenants make repairs to your property.  This is a lesson in risk management.  The question is, how qualified is your tenant to paint, fix the stove, install carpet or do anything else?  The next question is, if something goes wrong, are they covered for workers compensation?  Are you covered for liability if they injure someone else doing work for you?  The bottom line is that you might save some money, but your liability goes way up.

Fifth, keep the property in good repair.  At our firm we schedule every occupied property for an annual inspection. This inspection covers most easily seen items like caulking, visible leaks, carpet condition, appliance condition, and cleanliness.  An added benefit is that by getting inside your rental property annually, the resident is less likely to cause major damage or be involved in illegal activities since you are getting inside regularly.  We also suggest that our clients property be inspected by a licensed structural inspector (sometimes called a termite inspector) every two years.  While most owners do not take this suggestion, at least the annual visual inspection will catch most problems.  You might also want to have a roofer inspect your roof every two or three years.  This inspection is normally done at no cost and you will get a free bid for any repairs.   Most property managers have a trusted roofer they use.

Managing your investment houses is an important part of owning rental property.  Whether you hire a property manager or do it yourself, you need to know what needs to be done to make your investment successful.

HomePointe Broker, Robert Machado, has written an article on page 9 and our rent survey is printed on page 35

2. Now, turn off the air system. There are 3 places to turn off the air unit: We suggest turning the system off at the thermostat (temperature regulator). The reason the power must be off is because it’s safest for you and to prevent the older air filter dust from getting in the air unit.

3. Decide the correct air filters size and filter type. There should be a number label in the air filter side, it looks something like this: 20x20x1, 8x16x1 etc.   Choose which air filters are best for your home. There are air filters that collect dust mites, pollen, tobacco smoke, spores or viruses. Any filter will do, so long as one is used and changed every 3 months. Economy filters can be purchased for under $3.00 at your local hardware store or a store such as Target.

Filter on the left is cut to fit . Filter on the right is a custom fit filter

4. Remove the old air filter. Clean dust off of the metal grill with a dusting cloth and be careful when removing to not accidentally dump older air filter dust in the unit or on yourself.   Before you put in the new air filter there should be an airflow arrow printed on the outer frame of the air filter. This arrow shows which way to insert the filter.

5. After inserting, close the metal filter grill and reattach accordingly. Now that your done we recommend marking your calendar 3 months from the date you changed the filter, a reminder to change it again.
A clean filter is healthier, saves you money on your energy bill, and protects the most expensive appliance in your home.

Always follow the proper installation instructions on the package… HomePointe is not responsible for any air filters improperly used or replaced.

Converting an owner occupied property into a rental property is straightforward, but it is not the same a selling the property. Purchasers of real estate are not as concerned about small maintenance issues like paint condition, carpet condition, or cleaning. This makes sense because a purchaser of a home is looking at the long term prospects for the house and will cover the small items for the sake of a good deal on the purchase. But a renter wants an immediate payoff as rents paid today are lost forever. The renter has to be sold on the immediate benefits of renting your property. There are no long term benefits to renting.

So, what should be done to make a house rent ready to rent? Here is my list that we use as property managers at HomePointe Property Management.
1. Paint the walls. No shortcuts here, if the walls don’t look like they have just been painted, paint them. This is a cheap way to make your home appear its best. If you see any marks on the walls, paint them. I suggest you use a neutral color on all the walls. A common choice is Frost, an off white. Do not think that your prospective tenant is going to want you to keep the third bedroom walls pink in case they have a young daughter. The more you have customized the walls, the fewer tenants will want your place. I rarely hear that a prospective renter has complained that the walls are all off white. Neutral color is best.

2. In the Sacramento, CA rental market, put up good window coverings. This varies by market, so check with your property manager, rental housing association, or local realtors. No tenants I am aware of want to buy window coverings for a home they are renting. Do not go too cheap as cheap blinds will bend and break, strings will break, cheap will not last. You should be looking for a metal blind that will last six plus years with normal wear and tear.
3. Clean the carpets. In some cases you may need to replace the carpets. Have someone you trust look the carpets over and smell them. This should be done when the house is vacant. Do not trust you own nose, you have been there too long. Some homes still have the old shag carpet from the sixties and seventies. Make sure you carpet is both clean and up to date. No one wants to rent a house with outdated or dirty carpet.
4. Fix up and clean up the yard and exterior of the home. Curb appeal applies to rental properties as much as it does to properties for sale. Make sure the sprinklers work and put them on a timer. Tenants do not like to spend time manually watering your lawn. The first impression prospects will have is of your building exterior and yard. Make it a good first impression. You may have to paint your home if you have let this go. Depending on your exposure I have seen some clients paint only the front and get away with it. But make sure the whole exterior is protected from the weather.
5. Make sure everything works. Windows should lock, appliances should work, heating and air conditioning should work, doors and locks should work, put cover plates on, fence gates should be operational, fix broken windows, no leaks, no mold, and no trip hazards. If you don’t take care of these things before the tenant moves in, you will be receiving their call soon. Best to do it when you are not in a rush to please a disgruntled tenant.
6. Clean the interior, the garage, and the front porch. Do not forget the insides of the kitchen drawers and the garage.
A final question, would you move into the property in the condition it is in? If so, you are getting close!

I do not suggest requiring the property manager to contact you prior to accepting a new resident. This is a recipe for a fair housing complaint. You should have enough confidence in your property manager to allow them to make the decision. If the prospective renter meets the minimum criteria, why would the owner need to be involved? It opens the door for a problem if the owner disagrees with the property manager’s decision.
Items that you can set up prior to the search for a renter are minimum income levels (3 times the monthly rent is typical, 2 times in lower income areas), rental history required or prior ownership, and credit history. Some property managers outsource this whole process and others do it in house. HomePointe Property Management, my company in Sacramento, runs a credit report online and then we do our own discovery to verify income and rental/ownership history. Successful companies do it both ways.
Some of the items you can preset as conditions are your pet policy (be careful, you must accept service pets with no deposit!), deposit levels (different states have different restrictions), smoking policy, and the number of persons allowed in the rental (be careful to follow fair housing guidelines). Note that you should not set a number of children allowed.
Some companies run criminal background checks and some do not. Each company makes its own determination as to the need for a criminal background check. The rule is to treat each renter the same, either run them for all prospective renters or do not run them for any prospective renters.
There are many rules to follow in screening for renters. Make sure your property manager is consistent in its answers to your questions.
The next subject to be concerned with in selecting a property manager for your property is the property managment company’s knowledge and ability with regard to property maintenance. How do calls get answered? How are incoming calls from residents tracked by the property manager? How is it determined when the owner will be contacted? How are vendors selected? How are emergencies handled? Is there an in house maintenance division? If so, is it licensed and insured? How are after hours calls handled? Ask your prospective property management company these questions.
Fees you will be charged is usually very important to most owners of rental property. It is important, but I think you would agree with me that some of the other items I have already discussed earlier may be more important. A difference of a few dollars in fees is meaningless if the property manager cannot get your home rented to a quality tenant, for example. That said, ask what fees you will be charged. Single family managers will typically charge a lease fee, a management fee, and fees for bounced checks (from your residents). The property management company may also keep all or part of late fees collected from your resident. Some charge for inspections, delivery of notices, a percentage of maintenance, and advertising.
The important thing is to know what you will be charged. The total fees may vary, but again, other items carry a lot more weight.
Having a frank discussion with your prospective property manager, and carefully reviewing the property management agreement are essential to the process. Check out my website at www.HomePointe.com for more on property management and our management program in the greater Sacramento area.

First, try calling the resident at their home, cell, and work numbers to see if you can talk to them about the situation. You can also post a 24 Hour Notice to Enter the premises to determine whether or not the property has been abandoned. Is the refrigerator empty or has most of the food spoiled? Has electricity and telephone service been cut off? Check the closets and see if there is clothing left behind.
If you determine that the unit has been abandoned, you, as the landlord may then take possession and proceed to prepare it for re-renting. But, the safest approach is to follow the formal procedure outlined in Civil Code 1951.3 which requires waiting 14 days past the date rent was first due and unpaid, and then notifying the tenant of the suspected abandonment by posting a Notice of Belief of Abandonment on the door of the rental unit and mailing a copy to the tenant. Here is the wording on the form we use:
To _______________________________
All residents (tenants and subtenants) (full name)

The premises herein referred to are situated in the city of _________________________
County of _____________________________________State of California, designated by the number and street as _________________________________________________.

This notice is given pursuant to Section 1951.3 of the Civil Code concerning the real property rented to you at the above- described address. The rent on this property has been due and unpaid for 14 or more consecutive days and the lessor/landlord believes that you have abandoned the property.

The real property will be deemed abandoned within the meaning of Section 1951.2 of the Civil Code and your tenancy will terminate on __________________________________ which is 18 days after this notice is deposited in the mail unless before such date the undersigned receives at the address indicated below a written notice from you stating both of the following:

1. Your intent NOT to abandon the real property

2. An address at which you may be served by certified mail in any action for unlawful detainer of the real property.
So, after the 14 days of of waiting for the rent to come in, you must wait another 18 days after mailing the Notice of Belief of Abandonment for a total of 32 days. The reason for waiting this long is that an eviction will take this or longer since the tenant is not available to serve. But a word of caution. If you believe the tenant is just avoiding you, but living there, be sure to do a normal eviction and not this procedure.
Here is the wording from the civil code:
(a) Real property shall be deemed abandoned by the lessee, within the meaning of Section 1951.3, and the lease shall terminate if the lessor gives written notice of his belief of abandonment as provided in this section and the lessee fails to give the lessor written notice, prior to the date of termination specified in the lessor’s notice, stating that he does not intend to abandon the real property and stating an address at which the lessee may be served by certified mail in any action for unlawful detainer of the real property.
(b) The lessor may give a notice of belief of abandonment to the lessee pursuant to this section only where the rent on the property has been due and unpaid for at least 14 consecutive days and the lessor reasonably believes that the lessee has abandoned the property. The date of termination of the lease shall be specified in the lessor’s notice and shall be not less than 15 days after the notice is served personally or, if mailed, not less than 18 days after the notice is deposited in the mail.
(c) The lessor’s notice of belief of abandonment shall be personally delivered to the lessee or sent by first-class mail, postage prepaid, to the lessee at his last known address and, if there is reason to believe that the notice sent to that address will not be received by the lessee, also to such other address, if any, known to the lessor where the lessee may reasonably be expected to receive the notice.
After taking possession, you, as the landlord, are still responsible for any of the tenant’s possessions left behind if valued at over $300.00. That process is similar to the real property abandonment and must also be followed to protect yourself from the tenant who may come back for their belongings at some point.

Written by Broker of HomePointe Robert Machado