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12 Improvements that could actually Devalue your Property

A lot of things factor into how much your property is worth.  Things such as the location, square footage, school district and the number of bedrooms and bathrooms.

As a homeowner or investor, your job is to consider both what you can do to improve your home’s value, as well as what you may be doing to decrease the value and desirability of your property.

One of the main things to remember while trying to boost the value of your house is that people have a wide variety of tastes, wants, and desires.  These vary greatly both geographically and demographically.  A house with the ability to suit the largest group of people will sell and/or rent quickly.  The more people who find a house attractive when it hits the market, the better.

Let’s take a look at 12 improvements that many people make to their properties that can actually devalue their house.  These improvements can, and very often do, cause an otherwise desirable property to sit on the market far longer than it should and sometimes even lower the final price by thousands.

1.  Over the Top and/or Overly

Personalized Lighting Fixtures

Bit over the top unless you’re trying to sell or rent a Georgian Mansion

This is a really cool set of light fixtures.  However, I don’t think I’d want to live with them and 
I’d bet most people wouldn’t want to live with them either.

Nice lighting can actually help sell or rent houses.  However over personalizing anything will immediately cut your market by half or more.  If you’re an investor or landlord, save the personalized items for your personal home.  If you’re a homeowner looking to sell, it would behoove you to remove all personalized features whenever possible and replace with more “crowd friendly” features.  Remember, just because you LOVE it, doesn’t mean that everyone will.

2.  Over the Top and/or Overly Personalized Tile

Example of an extravagant tile design that is very taste specific
Another example of taste specific tile

Just like lighting fixtures, it’s best to remember that taste vary and what you think is stunning beyond belief, someone else might find garish beyond belief.  It should also be noted that while light fixtures are relatively easy and inexpensive to have removed, tiles are not.  Potential buyers will remember that when it comes time to make an offer.

3.  Too Much Wallpaper or too Taste Specific Wallpaper

While this wallpaper is unique, would you really want to live with it?
I’m sure the homeowners thought this was a great idea, but will potential buyers agree?

Wallpaper is making a strong comeback.  I personally think it’s great.  I love the way wallpaper allows me to add textures, colors, and design to my walls and sometimes even ceilings.  However, not everyone loves wallpaper and no one loves to remove it, potentially repair wall damage and then paint.  As a side note, border wallpaper makes a room feel smaller and shorter than it really is, so I don’t suggest ever using it anywhere.  People walk into a wallpapered room and the first thing they think is, “how much money and time is it going to cost to get this off the walls?” and “I wonder what’s behind that wallpaper?  Did they put it up to hide issues with the sheetrock and if so, what’s that going to cost me?”

4.  Textured walls and Ceilings

The two pictures above show textured ceilings
The two pictures above show textured walls

Textured walls and ceilings were all the rage for decades.  Popcorn ceilings or the swirly designed ceilings can still be found in many many homes even today as can textured walls.  Putting a texture on the ceilings and walls was an efficient and cheap way to hide any imperfections and the practice also grew in popularity as a design feature.  These days people like smooth ceilings and walls so when a potential buyer walks into a home with textured walls and ceilings, they tend to hit the nearest exit.  Not only can removing the texture (and then repairing the ceilings/walls) be expensive but it’s one of the messiest jobs in all of homeowner land.  If you have wall and/or ceiling damage, it’s cheaper, in the long run, to repair it rather than try to hide it behind texture.

5.  Carpeting Everywhere

How would you like to live with the carpeting in these two houses?  
I don’t know anyone who would love either of these.
Above are examples of neutral carpeting that isn’t beige, brown or cream

While carpeting is another design element that is making a strong comeback after years of being the first thing new homeowners ripped out, it’s still not popular enough with the majority of people to warrant installing it wall to wall in every room.  If your time and/or budget won’t allow for the installation of new hardwoods or neutral tile throughout your home and you simply must install carpeting, keep it neutral….not white neutral…but a neutral that won’t show dirt easily and will blend with many interior color choices.  If you go with carpeting, don’t skimp on the padding.  No matter how expensive your carpeting is, if it feels “thin” when you walk on it, it will automatically feel cheap.

6.  Bright and Bold Paint Choices – inside or out

Nothing changes the appearance of a room or house quicker and more dramatically, then the addition of paint.  While paint can definitely be your best friend, making a bad paint color choice will be your very worst enemy and can cost you thousands of dollars in resale or can make potential tenants run screaming for the hills!  So while painting is probably the cheapest way to refresh, update and improve the appearance of any property, the wrong paint color(s) can wind up costing you more time and money than almost anything else.

If you must paint the exterior or the interior of your property and you like bold colors, try to limit those colors to the hues that are less difficult (and expensive) to cover.  Anything in the families of red, pink, purple, blacks or deep blues and greens will take so much primer to just reach a coverable state that potential buyers will only see dollars and time flying out the window.  If your property is a rental and you paint these outrageous colors, you can expect very few applications.

Depending on the style and age of the home there are charcoal grays, slate blues, forest greens that will make the exterior of your home feel updated while still maintaining the integrity of the period in which the home was built without feeling garish…and will still give you that pop of color that will satisfy your desire and set you apart from the rest of the houses on your block.  Inside, it’s always best to go with muted tones.  Sage, gray, cream, etc.  Another great way to satisfy the tastes of those looking to purchase or rent your property would be to paint it white and give a reasonable allowance to the buyer (or renter – to be used on the interior only).  This allowance would be used to paint it the color of their choice.  If this is a renter situation, their color choices should be limited to a set of color swatches that you have pre-approved.

7.  Over-Improving the Kitchen or Bathroom

Everyone thinks that a great kitchen or bathroom can overcome any obstacle when it comes to selling or renting their property.  Everyone would be wrong.  While an updated attractive kitchen and/or bathroom goes a long long way, it is not the end all be all when it comes to a potential buyer or renters decision.

As a matter of fact, over improving a kitchen or bathroom can actually cost you money.  Taste, trends, fads come and go.  If you install a kitchen or bathroom that was designed on your own personal taste the chances are the next folks are going to rip it all out and start from scratch so they can have the kitchen or bathroom of their dreams – not yours.  You should also realize that when you improve a kitchen or bathroom that is a lot nicer than the rest of the house, you have just accentuated the fact that the rest of the house needs massive work.  The kitchen and/or bathroom immediately feels out of place with the rest of the house.

According to Zillow, you should try to never spend more than 10 to 15% of the value of the home on the kitchen and the same applies to the master bath.  In 2015, estimated that the average kitchen renovation costs approximately $56,768 with a return of only $38,485 which works out roughly to a 53.9% return on investment.

Be aware that the opposite also applies.  If you replace flooring, paint and dress up the rest of the property but don’t fully address the kitchen and bathrooms, you have just lost money.  Buyers understand that the most expensive and timely renovations in a property are always the kitchen and bathrooms and when they see that you have left those up to them, they will move on down the road unless you are willing to shave thousands of dollars off the price….and maybe not even then.

8.  Permanently Converting or Removing a Bedroom

Permanently converting a bedroom into anything else, is never a good idea and could devalue your property by as much as 10%.  That means converting it to a dressing room/closet, TV/Media room or home office.  That number is also true whenever you take a bedroom in order to make the master larger or to enlarge bathroom/master closet space.  If you must use a spare bedroom as a home office, TV room, playroom for the kids or even a home gym, make sure nothing in there is permanently installed so if you decide to put your house on the market down the road, everything can be removed and the room staged for its original purpose.

Combining bedrooms to make a larger bedroom might sound like a great idea at the time but according to Brian Davis, real estate investor & Co-Founder of the renting resource, this is a very bad move if you don’t plan on staying in that house forever.  He states, “Even small bedrooms add value to homes, as most families want children to have their own rooms but don’t mind if they’re on the small side.”  He goes on to say, “In my experience, each bedroom can add about 15% to the overall value of a home.”

9.  Sunrooms

A sunroom can be a great place to enjoy the outdoors away from the elements, but adding a sunroom is one of the worst home renovations when it comes to return on investment.  The only exception is if you go the extra, and very expensive, route of adding HVAC and highly insulated windows which in effect turns the sunroom into another interior living space.

You should also be aware that if the sunroom wasn’t properly permitted and built to code, you can be forced to tear it down before you can sell it.

Another thing to consider before deciding to add a sunroom is available outdoor space.  If your outdoor living space is already limited and you add a sunroom, you have effectively erased your outdoor area.

10.  Built-In Electronics

Home theaters are great for movie or sports fans but built-in electronics take up space in an otherwise usable room and could be very offputting to potential buyers.  As with all home renovations, personalization can deal to a decrease in home value and built-in technology that can quickly become outdated is no exception.

11. Swimming Pools and Hottubs

Unless you’re somewhere that’s hot at least 6 months out of the year, pools are generally more trouble than they’re worth.  Research has shown that only about 50% of the population really want them so you’ve just narrowed your buying market by half.

When you add the cost to build a pool, the added insurance cost, fencing and maintenance expenses, swimming pools add very little potential value to your property.

Hot tubs, just like swimming pools usually aren’t worth the investment.  Potential homebuyers with children might consider the pool and hot tub both as safety hazards.  Most homeowners don’t want a hot tub and they must consider the costs of removing the hot tub and then repairing the damaged lawn area or deck area where it sat when they consider their offer on your property.

12.  Garage Conversions

If you’re a fitness buff, if your children need a dedicated playroom or if a relative has moved in with you and you need more space, converting your garage into space for those needs may seem like a good thing.  However, many potential buyers may not agree.  Recently MarketWatch did a survey of 7,500 people on this very topic and a whopping 74% said that having a garage is extremely or very important to them.

As in the bedroom, conversion spoke of earlier, if you can convert the garage into whatever space you need without making permanent alterations, then you should be fine.  Otherwise, use the garage as a garage.

Completing Maintenance Requests Like a Pro | Birmingham, AL Landlord Tips

Completing Maintenance Requests Like a Pro
Maintaining your home is an important part of renting out a property. You have to keep the place in good, habitable condition, where everything works and is safe. Responding to your tenant’s maintenance requests as quickly as possible is necessary, which means you need access to a great team of vendors. There are a few tips and tricks that will help you manage maintenance like a professional. (more…)

Things a Real Estate Investor should Consider When Evaluating a Rental Market

The most self-directed way to invest and build our financial futures is investing in single-family real estate.  This is incredibly exciting but it can also be overwhelming.  Not only are we the proverbial captains of our fate when it comes to real estate investment, but we have an enormous amount of choices.

Each choice is distinct and different.  An investor’s choice in real estate market absolutely matters as each and every market deals with their own economies, supply and demand.  Each market also has its own individual set of rental needs.

For long term success, every real estate investor must thoroughly investigate their market before they begin searching the real estate listings and thinking about purchasing properties.


What makes a rental market desirable?

When it comes to rental markets, there are a few key factors that investors should look for as they scope out potential places to invest.  More than the factors that are directly associated with the real estate market, you will need to know which markets are hot and have rising home prices.  Every single family real estate investor should turn to the factors that indicate one key thing:  Sustainable, long-term growth.

How do you know if a real estate market is healthy?  Look for these 4 indicators:

1 – Population Growth

Population growth is one of the key indicators of the health of any market.  One of the things that single-family real estate investors want in their given market is steady, healthy population growth.  It’s an indicator of the overall health in their city, town, or neighborhood.  An influx of people typically indicates economic opportunity and growth, which in turn positively impacts things like home buying and home prices.

Neighborhoods that are mostly comprised of baby boomers will likely be looking to retire and perhaps downsize.  A population comprised mainly of younger people will likely have many renters, either through lifestyle choices or necessity.  The needs of these markets are drastically different.

2 – Economic Growth

The second indicator to observe is economic growth.  Is industry coming to your market?  Even if you aren’t a commercial real estate investor, it pays to pay attention to the commercial and retail sectors.  see what businesses are moving in or out.

There is a direct link between the economy, the real estate market, and the rental market.  If the economy is strong and wages are strong, people are moving in.  If people are moving in and making money, they will want to buy houses.  Housing demand increases.  Prices increase.  As a result, rental demand increases and so does rental income.

3 – Steady Price Fluctuations

Even in “hot” real estate markets, we tend to see price fluctuations.  While these can offer thrilling investments opportunities, they tend to burn out fast and bright.  That’s because rapidly increasing prices can only increase for so long.  While investors that are quick on the draw may be able to take advantage of the rapid appreciation in such markets, they may find that a crash is just around the corner.

That’s largely because severe pendulum swings in price and value just aren’t sustainable for the long term.  for buy-and-hold investors especially, it’s not about getting swept up in rollercoaster markets.  It’s about honing in on the steady markets that provide predictable returns.   Typically investors should look for markets that experience a 5% annual increase in home prices.

4 – Month’s Supply and Time on the Market


The classic indicator of real estate market health is to look at inventory supply and time on the market.  Everything in real estate investment is about balance.  Month’s supply is about the balance between supply and demand.  Too much demand without supply increases prices.  The opposite, and they decrease.  A six-month supply is considered healthy in most markets.

Similarly, time on the market for that supply is an indicator of health. While it’s not as accurate as month’s supply because a property can be delisted and listed again (thus resetting its time on the market), one can take a cursory glance on an MLS and see, in general, how long listings have been on the market, how many new listings pop up each day, and if inventory is moving. If the market seems slow, it could indicate any number of problems: lack of buyers, lack of buyer confidence, issues with the property, too-high prices, or general lack of demand.



How Much Should I Charge for Rent in Birmingham, AL?

How Much Should I Charge for Rent
The amount you charge for rent really depends on one thing: the market. Many landlords want to charge an arbitrary amount that matches their monthly expenses or the amount of cash flow they expect to earn. However, you cannot control what the market demands. There are, however, a few things you can control that impact the rental value of your home. (more…)

10 Mistakes Landlords make that can cost them tenants and cash

Everybody makes mistakes from time to time in their lives…..even landlords.  There’s no shame to it.  However, a landlord can make fewer and less costly mistakes if he/she is careful to avoid these 10 mistakes.

Incomplete or inadequate tenant screening
The tenant you place in your home will either make you a happy, profitable landlord, or a stressed, frantic landlord. Everyone’s perfect tenant usually has three of the same qualities. They pay rent on time, they take care of the property, and they follow the terms of the lease. You also want a tenant who is willing to stay in the property for a long time and is able to communicate any questions, maintenance problems, or concerns in a timely manner.
Many landlords glance at an application and maybe run a credit check before approving a tenant for their property. You have to dig a little deeper than that if you want to be sure you’re getting a great tenant.
If you fail to do a thorough tenant screening, you could end up with a tenant who has prior evictions, a history of damaging rental homes, or a problem keeping jobs. It takes time to screen tenants, especially if you’re a landlord doing it yourself. But, not screening tenants is one of the worst mistakes you can make.
The elements of a thorough tenant screening include a few important things:
  • Credit history. Ignore the credit score and focus on whether the prospective tenant pays utility bills and meets other financial obligations. Make sure you don’t see any outstanding debts to previous landlords or management companies.
  • Criminal history. Recent felonies or a history of violent behavior is problematic. Check everything from the terrorist watch list to the sexual predator database.
  • Employment and income. You want a tenant who earns at least three times the amount of rent. Talk to employers and ask for pay stubs.
  • Landlord references. Ask previous and current landlords about the tenant and whether they would be willing to rent to that person again.
  • If your prospective tenant is a parent whose child or children don’t live with them full time, are they current with their child support?  If their paycheck is garnished, where will your rent come from?
  • Do they like to party?  Check their Facebook, Twitter and Instagram accounts.
Failing to perform a thorough Move-in and Move-Out Inspection
Before your tenant moves in, you need to conduct a move-in inspection. This is where you go through the property, room by room and closet by closet, and you document its condition.  This is not only an important step in making sure the property is ready to rent but it also gives you the opportunity to demonstrate what the property looked like when you handed over the keys.
Make detailed notes and take a lot of pictures. No detail is too small. Photograph the condition of paint and appliances. Take pictures of floors, windows, ceilings – everything. At the end of the lease term, you’ll also conduct a move-out inspection. This will allow you to compare the move-in condition to the move-out condition.
This is important because if there’s damage that you want to charge the security deposit for, you’ll have to prove that the damage wasn’t there before your tenant moved in. Judges aren’t going to take your word for it. If you withhold $200 from a security deposit to fix a wall that has a gaping hole in it, you’ll need to show a picture of that wall without the hole before your tenant moved in, and a picture of the same wall with the hole when your tenant moved out.  It’s a mistake not to do this because you’ll end up spending money on repairs that should have been the tenant’s responsibility.
Lack of Legal Knowledge
Unless you’re a lawyer, you probably don’t spend a lot of time keeping up with legal changes and regulatory requirements. But, if you’re a landlord renting out property, there are a few things you need to be aware of, otherwise, you could find yourself embroiled in a lawsuit.
There are federal laws such as the Fair Housing Act and the Americans with Disabilities Act which impact how you rent out your property and to whom. Not following these laws can cost you thousands of dollars.
It’s easy to make an unintentional fair housing mistake. When landlords advertise their properties and choose tenants, they often don’t think about how their words, questions, and decisions can look to federal agencies such as the Department of Housing and Urban Development. Landlords often make the mistake of not screening all applicants consistently. You should have a written set of procedures so you can show your process of choosing a tenant to anyone who asks. Establish a list of criteria and hand that out to every applicant so that your requirements are in writing and non-negotiable.
Service animals and emotional support animals are not pets. You cannot deny someone with a documented service animal because you have a no-pet policy. This will get you in a lot of legal trouble. You cannot allow a documented emotional support animal and then charge a pet deposit or extra pet rent. It’s a violation of federal law.  However, the tenant must have documentation from the appropriate source that clearly states the animal is a required service or emotional support animal.  This documentation should become a permanent part of the tenant’s file.  In other words, if you don’t know the laws, you could make some very serious and costly mistakes.
There are also state requirements to be considered in addition to Federal requirements.  Further, some municipalities also have their own set of additional requirements of which you should be familiar.
You need to know as much about the landlord and tenant laws as you can in order to avoid disputes, lawsuits, and claims. Don’t make the mistake of thinking you don’t have to worry about these things.
Inconsistent Rent Collections
Tenants who don’t pay rent on time are a huge problem.  As a landlord, you probably want to be a nice person. That’s admirable. However, this is a business, not a social networking opportunity.  In other words, you’re not doing this in order to make new friends.  Your rental property (or rental properties) need to be viewed as a business because that’s what it is. It’s an investment that needs to bring you a regular income. When tenants are late with rent payments, your cash flow is disrupted. It’s a mistake to be laid back about rental payments.
Make sure your lease is clear about when rent is due, how much is due, and how it’s expected to be paid. The lease should also reference any late fees and other consequences that are part of your rent collection policy. Then, you have to enforce this part of the lease.
When you allow tenants to pay whenever they feel like it, you’re setting a dangerous standard. What if the tenants stop paying altogether? You might find yourself having to evict them, and if you’ve been inconsistent with your rent collection up to that point, getting them to meet their obligations or leave your property will be difficult.
Don’t get emotionally involved with your tenants. They will have excuses and stories about why rent is not paid on time, and some of them might even be true. But it’s your responsibility to get the rent in on time so you can meet your own obligations. If you have trouble enforcing your lease and consistently collecting rent, turn it over to a professional property manager so you don’t end up losing money or your property.
Deferring Property Maintenance
Maintenance can be expensive, and if you don’t have relationships in place already with some great vendors and contractors, it can be a struggle to coordinate. However, it’s a fact that your rental property will need maintenance and repairs at some point. Some landlords put those things off, which is a mistake. You absolutely must be responsive to maintenance needs. You have to be thorough and proactive.
Preventative maintenance preserves the condition of your property and keeps it increasing in value.  If you begin to ignore the small maintenance problems like leaks under the sinks or a hot water heater that leaks “just a little bit now and again”, you’re going to end up with bigger, more complicated and more expensive repairs in the future.  You’re also going to compromise the integrity of your property.
It will be difficult to increase rent or to keep good tenants in the property if it’s falling apart.  A badly maintained property has a negative impact on your tenants.  Your current tenants will move out as soon as they have the chance if their repair requests go unanswered.
You should also know that if you want to sell the property down the road, you can bet you won’t get anywhere near the money you might want for it if it’s not properly maintained.
Weak or Illegal Lease
It is well worth the time and money to get a licensed attorney who is experienced in both real estate and contract laws within your state to draft a strong and legal lease.  While it will be an upfront expense, this is a lease that you can use over and over so it will more than make up for the expense involved over time.
What is an “illegal” lease, you might ask?  An illegal lease is one in which the lease ask the tenant to do, or not do, something that isn’t allowed under the law.  An example would be if you put in your lease that the tenant could not become pregnant and have a child while she lived in your unit.  There was a time when landlords could refuse to rent to an adult with children.  No longer is that the case.  What if you include wording in the lease that states the tenant cannot have lights on past 8 p.m.?  If you said this would be unenforceable, you’d be right.
Another example of an illegal lease is one that while detailing what the landlord expects from the tenant doesn’t include details of what the tenant can expect from the landlord.  A contract can be declared null and void if there is no give and take written into it.  There is no such thing as a one-sided contract.  You must include what the landlord expects from the tenant AND what the tenant should expect from the landlord in order for it to be considered a legal and binding contract.
A strong lease will be very detailed as to the exact conditions of the lease.  Better to include too much detail as too little.  As an example, if you don’t want bikes stored in the breezeways but fail to include that in the lease, you may find it difficult to enforce that rule down the road or if you don’t want grills used on covered patios, that needs to be in the lease.  If you don’t allow non-working vehicles parked at the property, then include that in your lease.  It doesn’t matter if all of these items don’t apply to each and every tenant that you have or will have.  However, if you don’t include them in the lease and it does apply to even one tenant, that tenant can legally claim not to have broken their lease when you try to enforce the “rule”.  The stronger your lease, the more protected you are.
Perhaps the most common excuse a tenant will have for violating a term of the lease is the “I didn’t know” excuse.  That’s why it is imperative to sit down with the tenant(s) and go over each and every word of the lease with them.  Have them initial each paragraph as you have read and explained it to them.  Answer any questions they may have at that moment.  Getting them to initial each paragraph will go a long way to prove that they did indeed know and it will blow that excuse right out of the water.  Taking 10 minutes upfront to read the lease in its entirety and have them initial each paragraph before they sign the lease will save you countless hours down the road.
Showing a Property Before it’s Ready
It’s great to get your property rented as quickly as possible.  However, you should never advertise a property for rent until it’s ready to occupy.  Jumping the gun and allowing prospective tenants to tour the rental before it’s completely done, will turn them off quicker than it will excite them.  There are a few exceptions, like with anything else, but the vast majority of people will hear the price and see the condition and not be able to reconcile the fact that the price is based upon the finished product, not the current product.
Be patient and if someone should drive past your house while the workers are there and want to come inside to take a peek, nicely explain that you would be happy to take their name and number and call them once the work is completed.
Never show it to them before you’re done.
Not responding timely – being a Mystery Landlord
Everyone loves a good mystery and being mysterious is intriguing.  However, no one wants a mystery landlord.  Make sure your tenant(s) know how to contact you.  Make sure they know who to call at 3 in the morning during a hard rain when the roof is leaking or at 2 pm on Christmas afternoon when the basement is flooded.  Maybe you don’t want them waking you from your sleep or interrupting your Christmas Day festivities, but make sure they have the phone number of someone who can take care of it.  Not losing sleep is a perfect reason to hire a reputable property management company.  They have emergency numbers to call for these things.  Your sleep remains uninterrupted and they get their issue resolved.  Win-win.
I would venture to say that more business disputes are caused because the unhappy customer (or tenant in this situation) feels they have been inconvenienced or wronged and the business (or landlord) either responds in anger or doesn’t respond at all.  More lawsuits are filed for this reason than for any other.
As with any business that deals with the public, a landlord must be a good ambassador for their business.  Even if you feel their complaint is trivial….it’s not to them or they wouldn’t be so upset about it.  A sincere apology goes a long long way in diffusing potentially volatile situations.  Even if you don’t believe you did anything wrong a simple “I’m so sorry this happened.  What can I do to make it better” can oftentimes save a landlord from a lot of ugliness.
There is a difference between Raising the Rent and Jacking up the Rent
Some states have laws in place as to how much a landlord can raise the rent and when.  If your tenant has a one year lease in place, you cannot legally raise their rent until the lease is over.  Having said that, it is extremely wise for you to study the neighborhood in which your property is located.  If the neighborhood normally rents within the range (example) of $500 to $800 per month, charging $1,100 for your property is not a good idea.  You can trust me when I tell you that during the life of their lease, your tenant will discover this fact and when their lease if over, they will be gone.
The same can be said for raising the rent by $300 when their lease is up.  Raising the rent is fine but $300 a month is jacking up the rent.  The only exception to this, is if you have gone in and totally rehabbed the property to justify the $300 a month increase.
Not Offering Specials in a Soft Market
You don’t have to own a large apartment complex to offer a rent special.  Moving is expensive and anything you can do to make it less expensive is majorly attractive to a potential tenant.  If a tenant has looked at a property that is similarly priced, similar in appearance and amenities as yours but you are offering a move-in special, they’re going to take yours.
Move-in specials don’t have to break the bank.  My favorite is the free month with a 13-month lease.  They don’t get that free month until the 13th month.  Another good one is one month free but it’s spread out over 2, 3 or even 4 months.
If rentals are in large demand in your area, your property is located right with great amenities and it’s in great condition,  then it’s not necessary to offer a special.  But if there are other properties for rent like yours and priced near to yours in the neighborhood, a good move-in special could make you stand out from the crowd.

Screening & Placing Tenants in Your Rental the Right Way in Birmingham, AL

Tenant Screening
Your experience as a real estate investor and a landlord will largely depend on the tenants you place in your rental property. Therefore, it’s crucial that you choose the best possible tenant for your home. You also want to minimize vacancy, which is one of the most expensive costs property investors face. So, the goal with tenant placement is to find a high-quality tenant quickly, and to do everything you can to retain those residents. (more…)

Evictions and How to Avoid Them | Birmingham, AL Property Management Advice

Avoiding Evictions
One of the things most landlords dread is an eviction. No one wants to evict a tenant; it means you lose money, face a vacancy, and stumble upon potential property damage once the tenant is finally removed. If you want to avoid an eviction, there are a few things you can do to manage a tenant who isn’t paying rent or following the terms of your lease. (more…)

How to Find Tenants for Your Rental Properties

You’ve purchased your rental property.  You’ve had it inspected and addressed any deficiencies.  It’s up to code.  You’ve painted, cleaned, spruced up the exterior and it’s finally ready for its first tenant.  Now what?


Now that the curb appeal has been addressed and any interior problems have been fixed, it’s time to make the interior’s first impression the best possible.  How do you do that?  Staging.  Whenever you stage a property, it’s always best to use neutral colors and fixtures to accommodate a wide array of styles and tastes.  Never make paint, accessory, artwork or furniture decisions based on what your personal taste is.  You aren’t going to live there.

Please understand that neutral doesn’t mean beige, white and tan.  Do a little research on the internet to discover what the “new” neutral’s are.   One year sage and other light greens were the neutrals of the year.  One year it was all manner of light blues.  This year, it’s lighter versions of grays.  If you are still unsure, paint the walls, ceilings, and trim work white.  While white can be sterile and it can put a lot of folks off, it also bounces light around which tends to make a room appear cleaner and brighter than it really is and if you are the type of landlord who allows their tenants to paint the walls, it gives them a clean surface on which to put their personal paint color choice.

If you need help or you simply don’t have the time or inclination to stage your rental yourself, there are professionals that will come in and do it for you.  Of course, they don’t do it for free, but a properly staged property will heighten the “feel”  and desirability of the space.  As a result, you will get better-qualified tenants.  It will also lessen the time your property sits vacant.

Below are a couple of pictures of lightly staged properties.  Remember, you don’t have to make the property look as if someone is currently living in the unit.  Just give the rooms a sense of what they could look like if the prospective tenant lived there along with a general idea as to where they might place the bed or sofa.  This is especially true if the room is an odd shape or has a lot of doorways to obstruct furniture placement.  If a prospective tenant can’t figure out where to put the bed, sofa, TV, dining room table….they might walk away.  At one time, people thought that empty rooms appeared larger.  This is no longer the case.  It has been proven by independent studies that empty rooms not only appear smaller than they actually are but that empty rooms can oftentimes overwhelm prospective tenants as to where they will place their furniture and if their bed or sofa will actually fit comfortably in the space as most tenants don’t measure these things prior to looking at available units.



Kitchens and bathrooms don’t need a lot of staging.  You want the countertops to appear spacious and clean so just a couple of things to give it some interest, color, and texture and you’re done.


Marketing your rental property starts with taking quality photographs of each room in the space as well as at least 4 pictures of the exterior when possible.  If your property is in an apartment complex, it may not be possible to get 4 exterior shots.  In this situation, give them a front and rear view.  If there are any amenities that come with the property such as a community pool, golf course, park, covered parking….include pictures of those as well.

Note:  Never ever use pictures that were taken before the unit is 100% ready for occupancy.  Never.  Also, never use pictures that include people (or reflections of them in mirrors, windows or glass doors), animals, trash or supplies (cleaning or construction).  See photo’s below for examples.

With today’s internet access and the plethora of websites that offer rentals, people are quick to skip any property that doesn’t grab them with the first couple of pictures and they are more prone to skip rentals with no photo’s even quicker.  It’s better to delay your advertising for a couple of days than to post photo’s that aren’t as pretty as the unit you’ve just spent time and money on.

This might sound like common sense to many, but you’d be surprised how many ads I’ve seen that fall into each and every one of the items on the above “don’t” list.

Once you’ve taken your pictures and you’re satisfied with them, you can begin writing your rental ad.  In order to do this effectively you will need to determine:

  • Your rental price and if it includes utilities (water, trash pickup, sewer, etc.)
  • The square footage of your property
  • What you are going to charge as a security deposit (usually equal to one month’s rent.)  On the topic of deposits, you need to do a little bit of research because some states will allow you to charge more than one month’s rent while others do not.  If you live in a state that allows it, you can compensate for marginal credit by increasing the deposit.  However, if you live in one of the states that don’t allow increased deposit amounts, and you do it anyway, you could be open to trouble.
  • Availability and length of the lease.  Do you want to only rent it for the summer months?  Maybe only during a school year (for those rentals that are geared mainly for students and/or faculty).  Maybe you don’t want to rent it for the next 3 or 4 months (this is usually the case when a current tenant has just given you notice that they intend to vacate or if the owner lives out of state and won’t be available to show the unit until the next time they are in town.)
  • Whether you will allow smoking or pets
  • If there are any additional incentives, such as parking or a rent special.  When you have a rental in a highly competitive area sometimes offering a rent special will bump you to the top of a potential tenant’s list.  Example:  If they sign a 13 month lease, the 13th month is free.  Maybe you could offer a free month on a 24 month lease and break the month’s rent down into 4 separate months?  For instance, if the rent is $400 a month and they sign a 24 month lease their first 4 months rent would only be $300 a month.  There are endless specials you can offer.  If you need inspiration, call the managers of large upscale apartment communities and ask them what their specials are and which ones seem to work best for them.  Then just tailor it to suit your unit.
  • Gather information about the neighborhood and surrounding areas.  Including information such as proximity to the interstate or other major thoroughfares can be extremely helpful to prospective tenants that perhaps are familiar with the area.
  • How you wish to be contacted.  Do you want prospective tenants to call your cell?  Email you?

Write a clear rental advertisement that describes the rental property and covers price, location, length of the lease and any incentives.  Picture your ideal renter and target them in your ad.  Your goal is to make your property stand out from the others while still communicating everything a potential tenant needs to know to inform their choice.

There are many places you can advertise either free or paid.  Some of your options include:

  • Online classified ads
  • University housing boards
  • Word of mouth through family, friends and/or co-workers
  • Social media
  • Renting bulletins or apartment listings
  • Newspaper ads
  • A rental sign on your property
  • Community bulletins, such as at a grocery store or recreation center
  • Listing the property with a real estate agent or Property Management Company.

If you use quality photos, and an engaging headline and rental description, you might start getting calls immediately from potential tenants.  How you proceed with the process can depend on the volume of people expressing interest.

Many landlords will schedule appointments and show the property to anyone who is interested. Another option is to hold an open house at a set date and time, where you allow people to come by to view the property and hand out applications to all who express an interest right there on the spot.

Screening Applicants Using a Rental Application

Before narrowing down your choice of tenant, it’s important to do your due diligence and collect information about who will be living in your rental property.  A Rental Application allows you to collect a prospective tenant’s contact information as well as:

  • Their employment history and income
  • Their rental history
  • Credit Information
  • References

Once you’ve received the completed rental application along with copies of supporting documentation (i.e. Driver’s License, paycheck stub(s), etc.) you can then review the information that has provided to determine whether they would make suitable renters.  Typically, you would assess if they have a  stable income and a good credit score to see if they are responsible and earn enough money to pay rent.

Speaking to previous landlords can offer insight into a tenant’s rental history, specifically if they made rental payments on time and if they were a respectful renter.  Researching a tenant prior to leasing is a very important step that can save you from issues down the road.

When screening tenants for your property, you are held to the Fair Housing Act, which prohibits you from discriminating against tenants based on age, sex, race, religion, etc.  The Americans with Disability Act serves a similar purpose by ensuring that landlords make reasonable accommodations for any tenants with a disability.

Note:  Both Fair Housing Act and the Americans with Disability Act have other requirements and exceptions that you, as a landlord, should be familiar with.  It’s best to head to their websites and familiarize yourself with these requirements and/or exceptions.  The government hires “mystery” shoppers to randomly visit available properties in order to determine if the property and the landlord are obeying the laws.  Failure to obey can be very costly.

After checking the candidate’s background and deciding they are a good fit, you can put the wheels in motion to begin your paperwork.

Pre-Move in Checklist

You’ve prepped your property, advertised your rental, screened potential tenants, and settled on a renter.  What’s next?

The next steps involve nailing down the details of the tenancy and communicating with the tenant to arrange a move-in date and inspection.  Before moving day, you have to get a Lease Agreement in place.  Use this checklist to make sure you don’t miss anything important.

  • Clean the property and make any repairs
  • Create a Lease Agreement, go through the terms, and sign the agreement
  • Change the locks and cut an extra set of keys
  • Provide your tenant with your contact information both for emergencies/repair calls and for mailing the rent.
  • Collect the first month’s rent, security deposit, and pet deposit or fee, if required.
  • Conduct a rental inspection with the tenant and sign the report.  Provide them with a copy and make sure to put a signed/dated copy in their rental file.
  • Test lights, appliances (stove, fridge, dishwasher, disposal, all sinks, toilets and tubs/showers, etc.), fans, locks and smoke detectors with the tenant present.
  • Provide the tenant with a copy of any bylaws or condo rules if applicable.
  • Transfer any utilities to the tenant’s name, if applicable.
  • Determine the best method of communication for both parties.

Note:  It is equally important to have a Move Out Checklist.  Go through the property with the tenant once all of their belongings have been removed and they have notified you that they have cleaned the property.  Just as in the Pre-Move in inspection, check everything and notate on the Move Out Checklist anything that appears to be damaged or non-functioning.  Take loads of pictures of every room and the exterior.  Once the tenant has signed and you have given them a copy, you can decide what is normal wear and tear and what is actual damage to the property.  As long as you are very clear with the tenant that they will not get their deposit returned to them unless and until this step has been done, they usually comply with this step.  You should know that all states have a mandated length of time in which a landlord has to return a tenant’s deposit or give them a detailed letter explaining why they won’t be getting their deposit back.  Should you not comply with these laws, you might be out more money than you’d like.  If your tenant isn’t getting their entire deposit back, you must give them a breakdown as to why.

Landlord Tenant Laws

Renting a property creates a business relationship between a tenant and a landlord, which is governed by landlord-tenant laws and the Lease Agreement.  Each state has its own laws regarding rental property, so it’s important that you review the laws in the state where your property is located or contact a local attorney for advice on your specific renting situation.  By learning about tenant rights and state landlord-tenant laws, you can ensure you are following the best practices to avoid any future legal battles with your tenant(s).

Your Lease Agreement

A Residential Lease Agreement is a roadmap that will not only guide the relationship between you and your tenant but also set the rules for your residential tenancy.

A Lease Agreement also:

  • Protects you from liability
  • Prevents confusion over terms, rules or situations
  • Prevents conflicts or issues that arise from misunderstandings
  • Provides a written outline of the tenancy for recordkeeping purposes.
  • Offers a demonstrated understanding and agreement to the rental terms
  • Sets out the procedures for notices and eviction
  • Keeps expectations clear
  • Protects a tenant’s rights.

Types of Lease Terms:

The lease term is the length of time that the tenant is expected to rent the property under the terms of the Lease Agreement.  There are two types of terms:

  • A fixed term tenancy is one where there is a set end date for the tenancy.  Generally, these types of tenancies last 6 months or 1 year from the time the tenant moves in.
  • An automatic renewal (or periodic) lease term is one that continues to renew each month or year until one of the parties chooses to terminate the agreement.

Permissions in a Lease Agreement:

As a landlord, you get to make decisions about what will and will not be allowed in your rental property.  These are called permissions.  They commonly address matters such as pets and home improvements.

Consider what you are comfortable allowing in your rental property and ensure you address these in your Lease Agreement.

Some of the different types of permissions include:

  • Will you allow all kinds of pets or only certain pets?  Will you charge a pet deposit or monthly fee…or both?
  • Will you allow the tenant to make improvements to the rental property, such as painting the walls or planting flowers outside?
  • Will you allow smoking in the rental property?
  • Are home businesses permitted in the rental property?  Often, home businesses are a zoning issue and depending on the size and income of the business, it may or may not be permitted.
  • Will other occupants be allowed to stay in the rental property?
  • Will the tenant be allowed to sublet or assign the Lease Agreement?

Determining Your Rental Price

To set a rent price, you will need to figure out your monthly costs to run the rental property.  Think about your mortgage payment plus any additional expenses you are covering, as well as a condo or HOA fees.  Once you have your monthly figure, look at nearby rentals of comparable value to set your price.

Once you advertise your rental property, the price will be the main factor in drawing tenants and getting a leg up on your competition.  If you wish, you can also leave room to negotiate your price. Beyond rental price, ask yourself if you will be charging a few for late rent payments.  Some states have restrictions on how much you can charge and how late the tenant must be in order to be charging a late fee at all, but in general, it shouldn’t be an unreasonable amount.

Another element of price is utilities, such as electricity, sewer, garbage pickup, and water.  Should you include them in the rent price or make them the tenant’s responsibility?  Some municipalities include trash pickup in the real estate taxes so charging the tenant for that service might appear greedy since you are, in essence, already charging them for your yearly tax bill.

Now that you’ve covered all your bases, drafted the perfect Lease Agreement, found the perfect tenant and collected all the deposits and first month’s rent….it’s time to enjoy the fruits of your labors.




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