The Legal Bubble

Good:

1. Someone else is paying your mortgage while the equity builds in your home.

2. You earn a profit (hopefully) from the difference in the mortgage and their monthly payment.

3. Your credit score can increase because you own property or properties and your mortgage is being paid on time.

Bad:

1. Your tenant may not pay on time or at all and the financial burden falls on you (or risk compromising your credit).

2. Your house may require repairs all the time, which is more out of pocket expenses and more headache.

3. Your tenants may tear up your house and leave you high and dry with the expense of fixing it back up.

You can’t always tell who will be a ‘good’ tenant and who will not.  A good tenant pays rent on time, only calls you about legitimate issues (obviously subjective, but don’t call me because you saw ONE ANT in the house), and respects their home (takes care of it, keeps it clean!).  Well luckily I haven’t had horrible tenants.  Most of my tenants paid rent late, but I still got paid 95% of the time by the middle of the month.  What can you do to screen your tenants?  Well, pull their credit.  I believe I paid about $10 to run credit for my tenants.  You can google landlord and credit check and you will surely find a site to help you.  Additionally, check rental references.  This is very important!!!  I realized this when I wound up dealing with a bad tenant.  Make sure you have a good lease in place, and have an attorney draw it up or at least review it before your tenant signs it.  Don’t go to staples and buy one pre-printed.  I will provide a sample lease on this site in the near future.  Additionally, take pictures of the property before you turn the keys over to the tenants just in case something happens.  Once you have a signed lease and a security deposit, you must deposit the security deposit immediately.  If you don’t, and something happens later down the line, the Judge won’t be very happy.  Keep a copy of the key, but ensure your tenants that you do not do unexpected visits (don’t just SAY IT, follow it).  Call to check-up with your tenants every so often.  I check-in once a month (right around rent time).  At that time, hopefully any issues that may have arose will be brought up.

I once had a tenant who for the first six months paid on time or by the 5th.  After those 6 months were up, I got the rent late every month.  I chose to let her renew TWICE (I didn’t want to be bothered w/ searching for a new tenant, and after all she and her family weren’t destructive).  The rent started to come later and later in the month.  At one point she was paying half the rent, and her check bounced.  That was the last straw.  I wrote her a letter and told her she had breached her lease and I was terminating it.  She became a month to month tenant, and I was giving her 30 days to leave the premises.  Well she left and didn’t tear up anything, but there were carpet stains, a small hole in the wall, an outstanding water bill (an outstanding water bill is a lien on the house, so the landlord owner is responsible no matter whose name it is in), and an issue with the electricity meter (they came and took the meter hinting that electricity was being stolen).  We still have a court case pending.  I am still grateful she moved, otherwise it would have been a long and drawn out eviction process.  In Maryland, the courts give you a few chances to remedy your failure to pay rent before you are demanded to leave the premises.  I certainly didn’t have time for that, and to the small investor, this can create a problem because the mortgage company will still want their money.

 Being a landlord has its positives and negatives.  Just make sure you weigh them.  Keep money in your savings account in case you get caught up with a bad tenant.  You don’t want them ruining your credit.  Also, I suggest a home warranty so you are not paying out of pocket for repairs.  Lastly, be clear on the responsibilities of the tenant and responsibilities of the landlord as far as maintenance being done and who pays which utilities.  If you follow this advice, this will minimize your problems with potential tenants.  It’s easy to bend on these issues, but it is not recommended.

Besides lowering the price to something that will have them running full speed ahead, there are some other things you can do to improve the appeal of your home with the supply and demand being the way that it is currently.
 
1. Curb appeal
 
Yes, you will have to mow your lawn, trim the hedges, move trash, toys, etc from the front of the house, porch, etc.  Go to your local Home Depot or Lowes and buy some flowers and plant them.  Remember to buy some extra potting soil.  If you have a porch, you can hang some flower pots from there, or strategically place large planters.  Make sure you keep them alive while your house is on the market.  Dead plants and flowers are not pretty!  Landscaping can be expensive, but the local home improvement stores have flowers on sale, so buy them!  Just this past Saturday I saw some flowers (I forget which kind) for .89 per pot at Lowes.  Grab 10 or 20 of those and go to town.  Whatever they are, they were pretty and all different colors.  You can also catch some good plants or flowers for landscaping FREE on craigslist.  I’ve seen rosebushes, small trees, etc…  If you decide not to plant flowers because they CAN be time consuming to get them looking pretty, try little bushes/trees.  Make sure they are not dying, and add pebbles or mulch (make sure you’re SELLING because mulch is not recommended… they attract termites, and you don’t want them NEAR your home). I heard rocks have some other benefits, besides them being pretty, but I cannot remember what it was.  I will keep you updated!
 
Welcome mats are nice as well.  Red doors are attractive, so you may want to look into painting yours!  Be sure to buy exterior paint.
 
2. Declutter and Clean
All you should have in your house are the bare essentials… bed, nightstands, dresser, couch, dining table and chairs, etc.  Everything else should be gone.  Your place should look like it’s not lived in.  You should remove any/all personal features such as personal photographs, kid’s drawings, etc.  You should also move all toys away.  Keep just enough for a toybox, and keep the toys IN the toybox.  Remove everything off of your countertops in the kitchen, except maybe a toaster.  Less is best.  Replace all lightbulbs that are out or missing. Sweep, vacuum, mop.  Renting a storage unit is recommended for all of your ‘extra’ items.  Make sure you have rooms that are clearly defined.  If you have a room that’s an office, but you have a bed in there, and then it’s also storage, clear the room out.  Decide on one or the other, but don’t fill the room with too much furniture.  You want your potential buyers to imagine it as their own room, appreciate and notice the square footage of every single room.  Too much furniture and/or trash will make the buyer think the room is smaller, or cause them to have a mental block of the room when trying to recall YOUR house.  Always make your bed when you leave for the day.  Wipe down counters, mop the floors, clean all mirrors!!!  Clean your blinds (or replace) and windows as well.  People like the light/airy feel.  It also makes your home seem bigger.  If you have dirt and/or fingerprints on your windows, less light will shine through.  THIS SECTION DOES INCLUDE THE GARAGE… get some nice shelves and organize your garage so your potential buyers will appreciate the amount of space, and potential storage for themselves.  As a matter of fact, organize your entire home, but think MINIMALIST.  Also, don’t forget to clean those tiles and the ground between them in your bathroom.
 
3. Paint
It’s best to have neutral colors throughout, otherwise people will look back and think… oh that house with the ugly purple room?  You don’t want “ugly” used when someone is referring to your house when you are trying to sell it.  All colors are not for everyone.  Keep it off-white, tan, pistachio green, etc.  Re-painting a room or the entire house is recommended, since it causes the most dramatic change, and it’s not very expensive.  You can get a can of paint starting around $10 and up.  If you are really lucky you can get a discounted can of paint (half-price) from a store if someone has returned a custom color.  They sell some ugly colors, but sometimes you luck up and find something neutral/normal!  I’ve gotten a gallon with a satin finish for around $7.  You can always go back and have them match that color if you run out.
 
4.  Accentuate the positives
Fireplaces.  People love fireplaces.  Besides the solid brick, my two wood-burning fireplaces is what made me bid asking price for my current home.  Clean your fireplace, and if you have glass doors, clean those as well.  If you’re home or your realtor is showing the house, you may want to buy some logs to burn in the fireplace.  In the alternative (although I don’t love it) you can put candles in your fireplace.  People will love it!  Place a beautiful painting above your fireplace/on the mantle, a vase, etc.  If you have beautiful windows, get some nice window treatments to accentuate/frame the windows.  If you have a jacuzzi tub, place accents around it (not too many).  The list goes on, but think back to some things that jumped out at you when you decided to purchase.
 
5. Repairs
Make repairs that stand out.  Running toilet, leaky faucets, small hole in the wall, cabinets that won’t close, squeaky floors, stained walls from a previous BUT REPAIRED leak.  I’m no plumber, so I can’t give advice on that.  Sometimes leaky faucets is as simple as buying a washer/seal (round rubbery thing).  For holes in the wall, you can purchase a repair kit from your local home improvement stores.  It involves mud or COMPOUND, some sanding, a screen, and a few new coats of paint.  Cabinets may require changing hardware.  You could/should probably change the hardware anyway because that will change the look of your kitchen!!  Squeaky floors are sometimes the result of subflooring nails rising.  If it’s not too overwhelming, and you have carpeting, you can peel back your carpeting, and nail it back down.  If you have a stained wall from a leak that has been previously fixed, buy some KILZ and paint over it a few times, then put on a coat or three of your regular wall paint.  That should do the trick.  KILZ is stain/odor coverage.  Please do not paint over mold.  Consult your local mold expert.  Bleach did it for me, but don’t hold me to it.  I am not trained, nor have I studied MOLD.
 
6. Rearrange your furniture
You want easy walkways in your house, and not have visitors bumping into furniture.  Be creative, don’t scratch your wood floors.  Remember that couches don’t always have to go against a wall, nor do they have to run parallel to walls.
 
7. Temperature
Should be at a comfortable level, dependent on the season.
 
8. Last but not least!!!!
Bake some cookies or a pie (and invite me over) before an open house or when you expect potential buyers.  People love food, and the smell of baking goods, for that cozy winter environment (not cozy small, but cozy this could be my next HOME).  It’s a great technique for the fall and winter.  In the spring and summer you may want to go for the minty or citrus scent.  It creates a cheerful and clean environment.  Aromatherapy is good.  By the way, you don’t really have to bake (but if you do, give me a call!) because they sell candles with a kazillion scents.  Try those.  If you do bake, be mindful of food allergies, and let your realtor know of any ingredients that can possibly create problems.
 
These seemed like the most important tips, but obviously I could go on…. Stay tuned for more!!