The Ring Reminds Landlords To Not Leave Anything Behind

by sandy.linczer 31, October 2013 06:25

The Ring was a hit horror movie in 2002 starring Naomi Watts, Daveigh Chase, and Martin Henderson.  The movie is a remake of the 1998 Japanese film, Ringu, which involves a cursed video tape that kills anyone who watches it.  The string of terrors begin when two victims visit a cabin and find the video tape.  Out of curiosity they watch the video and that’s when the trouble begins.


If the property owner had removed all of his possessions before the tenant rented out the place, this string of deaths could have easily been avoided.  A deathly video tape is just one example of why property owners should remove all possessions from their house before a tenant moves in.  


For example, Ashoka Lion is currently dealing with a homeowner that left multiple power tools and a motorcycle in his garage.  If a kid happened upon any of these items, the results could be disastrous.  Another example that Ashoka Lion has dealt with is a client leaving multiple garden gnomes in her yard.  These gnomes had sentimental value to her and yet she wanted to risk leaving them there and chance a tenant or landscaper accidentally weed whacking one of her gnomes.  After much convincing, the client agreed to remove her gnomes from the yard and put them in storage.  

In addition to protecting your belongings, removing all belongings from the rental property is also the courteous thing to do.  But most importantly, it protects landlords from any liability if a tenant gets hurt tripping on an old lamp, playing with power tools, or you know, watching a cursed video tape and getting killed a week later.  

Happy Halloween from the Ashoka Lion Property Management Team.





Rental Unit - Great Way to Earn a Living

by Mirania 27, November 2012 16:59

To state the obvious, it is always better to own a rental unit that generates regular income than owning a property that creates heavy expenses. According to an interesting article published on Forbes.com (Click here for the full story from August 8th A 2012) earning an income from your rental units can prove to be a better financial strategy. 

Owning a rental unit has the following advantages:

  • It helps you earn a regular income (rent);
  •  It helps you obtain a positive cash flow ; and
  • You will be in profit even after paying all the expenses mentioned above.

Renting out your property can prove to be a profitable venture. There are countless landlords in Houston and Dallas area who have a flourishing business by renting out their assets. If you are looking forward to entering the business of renting property in Houston or Dallas area, you should master certain essential skills. The following tips and tricks will guide you to enter into the business of rental property. An ideal landlord possesses the following characteristics

  • Do you Deal with People well?: Being a landlord requires you to deal with vendors, tenants, governments, HOA, etc.
  • Do you know the right people? To be a successful real estate investor and landlord, you will need to build trusted relationship with real estate agents, contractors, banks, etc.
  • Do you have time to deal with a potential 24/7 commitment? You cannot expect that all repair emergencies will happen during business hours or when your not on vacation. If you work a job, then you will also feel times where those commitments will pull you in different directions.
  • Are you willing to build for a long term? The work you put in maybe only for $100 to $200 a month profit above your expenses (mortgage payment, management fees, taxes, repairs,etc), so you have to accept that your building a long term profit stream.

When you begin to answer those questions posed by Forbes, you may find yourself with answers like these:

  • Working with rental agents and property managers can reduce your cost of advertising and cost with failure to screen for tenants. For example, many property managers in the Houston and Dallas area have extensive marketing programs, can develop a better idea of market rent, and perform extensive screening that a typical investor may not be able to perform.
  • It might become impossible for you to manage several rental units concurrently. A successful landlord prefers hiring a property management company to take care of the rental units on regular basis. Similarly, if you have a huge rental asset, you should look for a property management company who can handle all the household problems effectively.  Property managers can remove the issues related with rent collection, dealing with emergency repairs, book keeping, keeping up with changes in landlord and tenant law, and more.
  •  You must have sufficient savings to buy properties. The best thing about purchasing a property with cash is that you can do away with the burden of mortgage payments.  Moreover, housing loans have also made it easier for an individual to become a landlord. However, if you have sufficient savings to invest in your rental property business, it will generate more profit.

Being a landlord is a viable way to earn a living for the right kind of person who has the financial resources, long term vision, risk tolerance, and ability to build the right team around them.

Landlords in Columbia facing scrutiny for not providing safe places to live for tenants

by Mirania 27, November 2012 16:09

Recently, we came across a write-up on The Maneater.com about maintenance issues in Columbia that are seriously affecting the relationship between tenants and landlords. The dilapidated condition of the rental units have left the renters in a condition that has violates the minimum health norms set by housing law. The article states that in the Dumas apartment building, located towards north of campus, a tenant used to sleep every night for over two months in a bedroom that had the windows removed, and due to the lack of a window rain and animals  entered the room.

In another East Campus house, there was an animal carcass had rotted in the house of a student. Moreover in  another rental apartment, the tenants were compelled to sleep in the dining room as the wed bedroom carpet used to smell like mold.

We often explain to our landlords both the investor and the “accidental” landlord (a person who is renting his home till the market gets better) that there are minimal standards. If you do not think that you can maintain minimal health and safety standards, then you will be violating Texas property code standards, which outline that a landlord should provide a home free of things that would affect the health and safety of a normal resident. Unfortunately, some landlords will not or cannot understand that, and they could face legal issues as well difficulty maintaining quality tenants in their properties.

As a property management company who operates in both the Houston and Dallas markets, we know it is important to make a healthy profit for our landlords and investors, but our property managers cannot do so at the expense of legal and moral obligations to our tenants to provide a healthy environment.  Therefore, if we feel that a client will not make the appropriate repairs in a safe and proper manner, then we are prepared to walk away from that client.

For the full story about the issues facing these Columbia tenants, click here.

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Psycho: Norman Bates was evil, but Marion Crane was no saint either.

by jay.raman@ashokalion.com 7, October 2012 15:40

As a child, I had a strong appreciation for Alfred Hitchcock's brand of horror. It was chilling, but subtle. Psycho was a prime example of the brilliance of the gifted Alfred Hitchcock. However, as I was reviewing this movie for our Ashoka Lion Facebook list of horror movies for property managers; I realized that Marion Crane (played by Janet Leigh) was no angel herself. If you recall, Marion had embezzled $40,000 from her employer, and this is why she was hiding at the motel. Unfortunately for Marion, she met her untimely death in one of the most famous murder scenese in cinematic history (the bathroom scene in Psycho is a all time classic moment).

As a property manager, I am obviously scared of knife weilding lunatics; but Marion's crime is equally as scary for a property manager. As a licensed Texas real estate brokerage in both the Houston and Dallas markets, we are bound by ethical and legal obligations of fiduciary duty to our clients.  Marion's crime could devestate a firm like ours if that money stolen was the client's rent money.  Our duty as a property managers includes safekeeping of the client's rent monies collected, insuring appropriate disbursement of funds to vendors, and keeping record of income and expenses. This is a duty that our firm takes very seriously, as we want to limit mistakes and issues from ever arising. It would be nice to claim mistakes would never occur, but this would be foolish, as humans are bound to make mistakes. The key is to reduce those occurences. Our processes and procedures are sometimes unique from other property management firms. For example:

 

  • Rent is not to be mailed to our offices in Houston or Dallas.   Many firms do allow tenants tenants to mail in payment, but our property management policy is to disallow this. Over the years, tenants will claim that the rent is lost in the mail, and they did send it In fact, tenants will go so far as to show receipts from money orders,etc to prove this. These kinds of issues can be dealt with at a eviction hearing, but today, some judges will have sympathy for the clients who provide some kind of documentary proof. The burden is on the landlord to prove that the rent was not paid at that point.
  • Property managers do not pick up rents.   We do not pick up rents from tenants. A few years ago, one of our property managers had her purse stolen after leaving a property. Reprimanding the property manager does not solve any issues, and a landlord may have sympathy to our plight, but they expect their money to be remitted to them. Fortunately, this crime only resulted in the loss of a few hundred dollars of rent, and reimbursing the owner for that loss was not dramatic. However, that lesson taught to my property management team has stuck with us to this day. Our rent collection process does not involve picking up rents either.
  • Double entry accounting of money on two systems: We maintain our records of our bank accounts on Quickbooks for our internal records, but we also maintain our owners and tenant records on a web based system as well. By utilizing the two systems, we are able to identify issues more quickly as we use different staff to handle each system's entries.
  • Match Bills to Work Orders: To pay bills of nonutility nature, our accounting staff is required to upload invoices to an appropriate work order. If they cannot locate the work order or the work order amounts do not match, the back office staff will assign a review to clarify and approve the bill.
  • Person who organizes payments is not person entering bills: Our staff divides the role of uploading bills and paying bills to two different persons. Occassionally, our office will get a bill that we missed or some how the system was not working, and our managing director will sign off on the overriding the control. This separation of duties further insures that bills are paid as appropriate and reduces risk of a employee embezzling the funds.
  • Person who organizes and sign off on payments does not perform the reconcilation of the bank account.  Our managing director approves payments if they do not follow our process procedure and he is the only signer on the account , but another member of our back office team does the reconciliation of the various property management accounts (escrow owner reserve, accounts, escrow deposit accounts, etc). This separation of duty further reduces risk that a fraudulent act could occur.

Marion Crane may have been victim to a insane man living in a creepy house with his deceased mother, but her crimes against her employer scare property management firms like ours almost as much as Norman Bates (played by Anthony Perkins).

 

 

The Omen: Signs of the appocalypse that we see as property managers

by jay.raman@ashokalion.com 6, October 2012 00:30

The original The Omen was a 1976 movie that scared me witless. I remembered that I watched the movie on local network 20 Vision in Houston, and I was way too young to watch something that scary. The movie was just so scary to me, as it involves the story of the AntiChrist's arrival to a family by way of a secret adoption by Robert Thorn (played by Gregory Peck) due to the loss of their own baby that very same night.  The adoption was secret to protect Robert's wife, Katherine (played by Lee Remick), from the emotional trauma of losing her own child. 

This first movie was focused on this child's infancy stage to being a young five year old child.  The signs of evil surround Damien as he grows up. Among the signs that we come to bear witness to are that he had a birth mark under his with the numbers 666, a nanny who commits suicide proclaiming it is for Damien, a evil nanny who replaces the recently deceases nanny and brings with her a Rotweiller (who brings a Rotweiller to a new job?), Damien's own terror when approaching a church or sacred ground, and many other ominous signs.  The protagonist is Damien's adopted father, who is faced with the decision to try and stop his adopted son. Being a property manager in the Houston and Dallas area, we have our own version of omens that fortell of doom.  4 omens are:

1) Owners ignoring preventative methods to maintaining their property- Sometimes owners will ignore issues that should be dealt within a prompt manner for numerous reasons including financial ability to pay, desire to improve profit, belief that the problem is not severe to merit attention, and various other reasons. Like The Omen, these ominous signs rarely go away, and in fact, many times, they just get worse. For example, we always warn owners to consider preventative maintenance of their AC systems, Furnances, etc. We know that the situation may get worse and lead to a owner having a larger issues later on down the way.

2) Owners who only focus on price when comparing our bids to a untested random vendor- Another dangerous omen that we come across are owners who refuse to accept pricing from qualified vendors. Some owners will balk at the idea of spending money for various maintenance service, but in our experience as property managers; we know that the vendors that we are asking for assistance are expeirencd and qualified.  Our property management company will request fair pricing, but we do not necessarily work with vendors on the basis of price alone. Our goal is to find affordable, experienced, responsive vendors so that we can balance quality and price.   Sometimes, owner's balk at prices of services, and they will use vendors that they find on Craigslist and compare them to the prices that our property management companies vendors will charge. We warn owners that using untested vendors on the basis of price can lead to heart ache.

As property managers, we are caught in the middle, as the owner will have issues with quality, price, and responsiveness with these untested vendors; but we are also hearing from the tenants, who are demanding problems get fixed in a timely manner.  This is why we always invite owners to provide us the names of quality, respected vendors that they have experience with who will be open to joining our vendor list when they sign up for property management services from us; but we warn them that just using any random vendor could be a disastorous.

3) The owner who refuses to set the price near the recommended rent that the market indicates- Prior to listing a property for rent, our broker will send a landlord a rental maket analysis (referred to a comparative market analysis or "CMA" for short).  We do this to help set the expectations that a property hopes to achieve in terms of rent rates. Ocassionally, our property managers will come across a owner who has their own value that they feel, and they will ignore our suggestion. We have often learned that this owner will still blame us if their property is not moving off the market.

4) The owner with unrealistic expectations of money being remitted- This owner will not accept our processes and timelines as realistc. We tell these prospective owners that we often will remit rents back in the middle of the month, and they find it unacceptable. They argue that they have to pay the mortgage. However, we tell them that this is not a unrealistic expectation because the tenants could be late, bank holidays and weekends adjust when rents will clear a account, our staff has to reconcile and review the owner's  rental property activity to make sure that we have netted all appropriate expenses prior to sending it out, and a myriad of other reasons.

We explain that a owner should not bank on the fact that the owner's rental draw will to be in prior to most mortgages being due. This kind of owner tends to get mad and frustrated at the onset, so we always politely explain that our processes and services are built on reducing mistakes and insuring that we are carefully accounting for the monies provided to us. If they refuse to see rationale of our systems, we will let the owner know that our firm may not be the right fit for their services.

Though our signs are not the same as world ending signs that the threated in The Omen, but these signs do scare us as property managers.

 

 

Seven: The sin of gluttony brings flashbacks to how tenants sometimes take care of their property

by jay.raman@ashokalion.com 4, October 2012 13:16

When I watched the movie "Seven", there were many graphic and difficult scenes to watch.  Seven was a thrilling movie starring Gwyneth Paltrow, Morgan Freeman, Brad Pitt, and Kevin Spacey.  In the movie, a unnamed killer (who in the end is simply identified as John Doe) arranges several gruesome murders to replicate the seven deadly sins.  If you watched the movie, you probably cringed at how graphic and disgusting some of the scenes were. However, over the years as a property management company in the Houston and Dallas markets, we have found homes that would have seemed to be scenes straight out of the movie. I never understood why tenants would request a home be immaculate, but then upon a inspection, we discover that they take very little care of a home after they are given the keys.  Ashoka Lion will share one tenant story (name will not be revealed) to illustrate the kinds of flashbacks to Seven that we get as a property management company on a periodic basis.

My tenant story involved a lady who on paper seemed to be a solid prospect. Solid work history, no eviction or broken leases on record, made pretty good money , and did not register any red flags criminally. However, after this tenant moved in, we had a plumbing request. She had garbage disposal problem. We sent repair guys to the home, and they were thoroughly disgusted. In the home, they found dishes were piled high with uneaten foods left around the room and trash everywhere. The repair guys are instructed to inform our property managers of these kinds of issues, so we can schedule follow up inspections or send warning letters to tenant.  The guys continued to resolve the issue, and in the garbage disposal; the repair guys found pork bones and silverware in the garbage disposal. We obviously warned the tenant regarding this matter, but like a horror movie, this was just the begining. She later complained that the toilets were blocked up, so our property managers had to send repair guys out again. She had called our property managers to tell us that the toilet was blocked at 1 pm on a weekend, and we got a guy there around 6 pm. To our horror, her toilet was blocked up, but instead of leaving it alone; her family decided to continue using the toilet and caused it to over flow (no further details needed).

Truthfully, dealing with a tenant like this will make property management firms and their landlords think of the sin of wrath (not discussing further to avoid revealing too much about the movie).

 

 

The Fly: Another reason to not bring your work home with you

by jay.raman@ashokalion.com 3, October 2012 14:37

The Fly is a movie about a scientist who uses a warehouse like space to live and conduct experiments. Unfortunately, his experiment involves teleportation of items, and during one of his experiments a fly is trapped in the teleportation pod. THe unfortunate scientist begins to mutate to a savage cross of insect and man. Now, I know that most people are carry out teleportation or time travel experiments in their homes, but as property managers,we do come across people who try to use their home as a place of business. Our property management company's policy in our Houston and Dallas leases is that a home, duplex , condo, or apartment is used as a residence.

Allowing tenants to run a business out of their home is not a good idea on so many levels. First, the business is probably prohibited by community or homeowner association. Second, the business customer traffic to your home increases the risk that a incident can occur at the home. Third, many homeowner policies do require notice if the home is being used as place of business.  Our stance against home based business is not to be confused with a stance against people who bring their work home or who telecommute into their work.

Therefore, when our property management firm was approached by real estate investors or others who seek to use our homes as group homes, day care business, etc; we politely explain that most of our properties would not be qualified to be used in such a manner. However, in parts of Houston (namely the Heights and Museum District areas), where homes and properties can be used in a mixed use manner. In these scenarios, it is possible to lease to a person in this manner, but it would be important to use a commercial lease and know up front that the tenant's intent is to run a business.

Next time, your tenant backs up a truck filled with large nuclear powered pods, just remember that we warned you.

 

 

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CUJO: Pets are a big deal for landlords

by jay.raman@ashokalion.com 1, October 2012 23:55

Cujo is the story of a family's dog (a mastiff), who becomes dangerous after becoming rabid (or some disease).  The dog attacks a family coming to visit another family, and they cannot escape. It maybe unlikely tenant's will ever have a dog turn into a crazed animal, but unfortunately; this story can happen. Every year, people in Houston, Dallas, and around the United State come across sad, tragic stories of animals attacking people.

There are many owners and landlords who are not comfortable with pets for the risk of damage to the home, but another factor to consider is a pet bites can be held potentially liable to the landlord. As a default, our property management firm will usually accept pets on a case by case basis. We request applicants turn in a picture of the animal, fill out the pet addendum which details size, age, breed, and has a few questions that the applicant should answer about animal ever biting someone, etc. We also request pet owners who apply to turn in any proof of vet shots, registrations, and/or training to help our landlords for our properties in Houston and Dallas get a comfort that the animal is being cared for by responsible pet owners.  If the owner accepts pets, then we usually request a refundable pet deposit and adjust the rent to compensate for the additional risk that a pet. As a general rule of thumb, we also request carpets be professionally cleaned and tenant's are required to carry renter's insurance with appropriate liabillity (300k).

 

Amityville Horror: Know before you buy!

by jay.raman@ashokalion.com 1, October 2012 14:34

To commemorate Halloween, Ashoka Lion will be providing a fun look at our favorte horror movies. Amityville Horror (1979) was the story of a family who got a great home for a incredibly low price. Unfortunately, this home has a few issues including leaky pipes, bad phone connections, pest problems, and of course a demon possessed home. Now, I doubt most investors or landlords in Houston or Dallas ever face the need to have a home excorcised while adding a new paint job and floors, but it does remind owners to understand that unexpected things can pop on any real estate investment.  It is very difficult to learn every aspect of a home before buying, so the unexpected can arise. For our firm, we do request owner's to tell us about their rental properties to help us have a idea of what we could be facing.

The disclosure forms help us to know if there were any major repairs, types of ammenities, and features. Also, it helps our owners to remember things that may have been issues in the past (foundation, termites,etc). This kind of information helps us better understand potential issues that may arise and cost as a landlord. Owners must realize that those cost must be reserved for potential replacement for things like water heaters, garbage disposal, carpets,etc.  Being a landlord can be very lucrative, but it means trying to understand the risk. Our job as property managers are to help our Houston and Dallas owners understand and prepare for the worst and minimize the risk.  However, even with the experience of our property management team, you can encounter weird situations.

Now whether you are home buyer or investor, you have to accept the risk of the unknown, but I am not sure whether there is enough of a deal for a investor to buy a home that scream "GET OUT" to you!  

Check out our list being revealed at our Facebook page.


Importance of Screening Tenants

by Mirania 31, May 2012 19:52

Proper screening of your tenants is the most important factor for renting out your house as it helps eliminate tenant problems significantly. As a landlord, you should always ensure that you are renting out your property to an eligible and responsible tenant.

We often come across various landlords in Dallas and Houston who have been facing tenant problems because of their ignorance about the tenant screening process. As investment property managers, we always advise our clients to do proper screening of the prospective tenants before leasing the property to them. Screening tenants is important as it saves you from imminent troubles by reducing the threat of possible loss of income from nonpaying tenants and tenants who may not care for yoru property. Moreover, it also protects you from all legal hassles. as the eviction process in Houston and Dallas for example can take up to a month and have additional court fees.  

If you are starting out in property investment and planning to rent out your property, we hope that these tips would help you conduct careful screening of your tenants to eliminate all potential tenant related risks.

  1. Rental Application: The first step is to make your potential tenant fill out a rental application so that you have complete information about the tenant for verification. Rental applications help you to make the right decision for renting out your property. Once you get the rental application from the potential tenant, you should review it properly and trace out if there is any inconsistency in the application.

  2. Ask for Identification:  The prospective tenant should also provide you with valid identification details such as a copy of a Social Security card or drivers license. These details should be provided along with the rental application. Please, remember that when you take these documents that you have obligations to safeguard these documents as a property manager or a landlord. You should have proper storage and document retention policies in place.

  3. Do background checks: The next important step is to conduct a background check. As a landlord or property management company, you should take all possible measures to perform a background check of your tenants. This helps you to ascertain that you are renting out your property to a qualified tenant. While doing a background check keep the following factors in your mind:
    • Call the present landlord to know about the potential tenants.  You can find out if tenants have a habit of paying late, have a balance, or take care of the property
    • Do a proper analysis of their employment details. Make sure you figure out if their take home pay is enough to cover rent and other obligations.
    • You should also ensure that the prospective tenant does not have any criminal history that will put the property or community at risk.
    • You should verify with employers to make sure that the tenants are presently employed.

  4. Check the credit history of the prospective tenant: Credit checks of potential tenants are equally essential to safeguard your interests as a landlord.  Credit reports can help you determine if the prospective tenants will pay on time.  Please note that tenants in today’s economic situations do have issues, so you may have to do a further analysis including putting more weight on rental history. 
  5. Get an eviction check done:  This is another important stage of tenant screening process. Past records of an eviction indicate that the tenant has the habit of skipping rent-payment. It also indicates that he or she might not leave your rental property if you experience any issue related to rent payment and other relevant issues.

  6. Utilize a strong rental agreement: It is imperative for you to create a rental agreement that should lucidly explain the terms and conditions of renting out a property along with the code of conduct. The rental agreement should be properly read to understand the duties as well as the responsibilities of the tenant as well as the landlord. The lease agreement should be duly signed by both parties  (or a duly appointed property management representative). If you used license realtors or licensed property management firms, then they should have access to well drafted and legally binding leases that are consistent with the landlord and tenant laws of your state. Your prospective tenants should know exactly what is expected of them. If they balk at a well drafted lease or terms, then this could be warning signs that you could have issues in the future.

These tips will help you ward off difficult tenants, and help to ensure that landlords and property management companies get the best tenant for a rental property.