Month-to-Month vs. Yearlong Leases: The Pros and Cons

Posted on by Bay Management Group

month-to-month-versus-year-long-leases-philadelphia-rental-property

Have you ever wondered why your Philadelphia tenants sign 12-month lease agreements? 

While most property owners have tenants sign a yearlong lease agreement that can be renewed for another 12 months come the end of the lease term, there are those that prefer month-to-month lease agreements instead.

If you are curious about the pros and cons of month-to-month lease agreements, and wonder whether yearlong leases are a better option, keep reading.

First, we are going to discuss what it means to offer month-to-month lease agreements. Then, we will examine both the positives and negatives to offering month-to month lease agreements, and instances where a yearlong lease may be your best bet.

 

What is a Month-to-Month Lease Agreement?

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Unlike yearlong lease agreements that allow tenants to reside in your rental property for 12 months at a time, a month-to-month lease agreement is a agreement that lasts just one month.

Typically, this kind of lease agreement automatically renews month after month, until the tenant or property owner provides a notice breaking the month-to-month cycle. The amount of notice given (if required) is usually 30 or 60 days, and is outlined specifically in one of the lease provisions.

The Pros of Having Month-to-Month Lease Agreements

Many landlords find month-to-month lease agreements suitable for their rental property business.

In fact, there are several benefits to offering tenants the opportunity to sign a month-to-month lease agreement, rather than the more traditional yearlong lease.

1. Flexibility

One of the biggest reasons property owners like to offer month-to-month lease agreements is because of the flexibility this type of lease offers both themselves and their tenants.

Rather than locking a tenant into a 12-month contracted lease term, month-to-month leases give both landlords and tenants the chance to break the lease in a moment’s notice, without having to find a subletter to finish the lease term.

For tenants seeking a new job in another city, this type of arrangement works perfectly. A tenant that is new to Philadelphia may sign a month-to-month lease while getting familiar with the area, and deciding exactly where to settle down.

There is also an element of flexibility for property owners. If you want to move into your rental property at some point in the near future, leasing on a month-to-month basis provides income until you are ready to do so.

 

2. No More Stress About Bad Tenants

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There is nothing worse than placing a bad tenant in your rental property. You know − the kind that mostly pays on time, complains a lot, disrupts the neighbors, and yet never quite breaches the lease agreement enough to warrant an eviction.

Imagine having to deal with them for 12 months.

Now, if you happen to place a bad tenant in a property that you only offer month-to-month leases on, you can easily get rid of them by providing them with a 30 or 60-day non-renewal notice.

 

3. Premium Rent

Tenants looking to lease a property on a month-to month basis are aware that the asking rent rate is going to surpass that of neighboring properties with 12-month lease terms. This premium pricing can help offset any vacancies you experience.

And, if you don’t experience many vacancies, you simply generate more annual income, which is always welcomed.

In addition, since month-to-month leases have tenants coming and going more regularly, you can increase your rent at will once one tenant leaves and another enters. Unlike 12-month leases that lock in yearlong rent rates, you have the flexibility to reap more income, should the market demand it.

 

4. Vacation Home Ready

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If you intend for your rental property to be a vacation home, offering month-to-month leases is ideal. You can garner higher rental rates, supplement your income throughout the year during peak traveling seasons, and even enjoy your own property when it is not occupied.

 

The Cons of Having Month-to-Month Lease Agreements

On the other hand, offering tenants month-to-month lease agreements does not come without its risks.

In fact, for many property owners, month-to-month lease agreements are too risky and are not worth the benefits.

 

1. Higher Turnover Rate

People who lease month-to-month usually have plans to live elsewhere within a short period of time.

After all, why would they pay premium rent rates if they wanted to stay long term?

That said, finding tenants to lease on a month-to-month basis is not always easy.

If your property stays vacant for long times, you begin to lose a lot of money. And, since your tenant has every right to terminate the lease agreement at any moment, just as you do, the risk of vacancy only increases.

This is why offering yearlong lease agreements can be more beneficial than month-to-month ones.

Having a tenant agree to stay for 12 months guarantees that you will receive rent income for an entire year. And, if your tenant decides to break the lease early, as long as you’ve got a strict lease agreement in place, you will receive financial compensation for the lost income.

 

2. Difficulty Placing New Tenants

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Offering month-to month lease agreements can create a stressful situation when it comes to placing new tenants in a freshly vacated property.

Since most month-to-month lease agreements only require a 30-day notice to vacate, property owners find themselves facing a loss of income, unless they find a new tenant to move into the property within the 30 days.

Tenant screening and placement not only takes time, but is also a strenuous process if done correctly.

By having a tenant in your rental for 12 months, rather than a few months here and there, you reduce the costs of tenant screening, and reduce the stress of finding a high quality tenant that will pay on time or the stress of having to stage your property for the next set of new tenants on a regular basis.

 

3. More Wear and Tear

If you are constantly moving new tenants in and out of your rental, your property is bound to experience more than the average amount of wear and tear.

Tenants leasing your property for a few months may not care for your property as well as if they planned to stay for the year. Plus, the physical act of moving can cause damage to your property’s floors, doors, and walls.

Unfortunately, normal wear and tear repairs fall upon property owners to fix. This type of property maintenance can quickly erode any positive cash flow you earned for the year, depending on the extent of the damage and how many tenants flow through your property in a given year.

 

In the end, owning rental property is not for the faint of heart. Drafting, adhering to, and enforcing a lease agreement can be challenging for even the most experienced property owner, regardless of whether you opt for a month-to-month or yearlong lease agreement.

There are pros and cons to both a month-to-month and a 12-month long lease agreement for your Philadelphia rental property, and what will work best truly depends on your needs as a property owner. However, self-managing your property does not have to be an added stress to leasing your rental.

If you are looking to take a load off your plate, and need help drafting the perfect lease agreements for your month-to-month tenants or yearlong ones, contact Bay Management Group today to help.

We have the knowledge to help guide you when it comes to the length of your lease terms. We also have friendly and experienced property managers that can handle all things property related for you.

 

Should You Offer Move-In Specials to Entice Tenants?

Posted on by Bay Management Group

should-you-offer-move-in-specials-tenants-annapolis-property-management

Staying ahead of the competition is tough when you are a property owner in Annapolis. As the capital of Maryland, and home to the United States Naval Academy, there are plenty of tenants looking for a great place to live here.

And other property owners know it.

If you are wondering how to stand out from the crowd of property owners looking to capitalize on the appeal Annapolis provides tenants from all around – think rich cultural history, beautiful architecture, and perfectly maintained landscapes – it is time you consider offering move-in specials to entice renters to lease from you.

Move-in specials have the potential to attract a lot of attention to your vacant property, making sure that you have the largest tenant pool to choose from.

In addition, a good move-in special may convince a tenant deciding between two properties to choose yours over the alternative.

Today, we are going to look at several types of move-in specials to help you decide whether you should consider offering them to your Annapolis tenants.

 

When a Move-in Special is a Good Idea

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Before looking at the various move-in specials you might want to offer your Annapolis tenants, let’s take a look at some of the conditions that, according to RentPrep, affect whether you should offer a move-in special or not:

  • Market Conditions. When the competition is tough, and property owners in the same area are racing for the same tenants, consider offering a move-in incentive. This way you can attract the largest tenant pool possible, and be pickier when it comes to tenant placement.
  • Less people tend to move during the winter season. Not only is it cold and less desirable to move, the holidays play a role in people’s financial decisions, and school is still in session. All these things cause many people to avoid moving, which means filling your vacant property will be more challenging. Offering an enticing move-in special can help.
  • Nearby Construction. If your investment property’s area is experiencing a boom in construction, this will be a good thing for your tenants – after the fact. However, during construction it will be harder to find tenants willing to deal with noise, blocked off areas, increases in traffic, and unfinished buildings near their home. Try offering them a move-in special and convincing them that the construction will be worthwhile.

These are just some of the most common reasons a property owner might consider offering prospective tenants a move-in special.

If this sounds like something you are dealing with right now, keep reading to find out what kind of move-in specials you can offer to boost tenant placement.

 

Top 7 Move-in Specials You Can Offer Your Prospective Annapolis Tenants

1. Flexible Lease Terms

It is important you draft airtight lease agreements that your tenants understand from the day they move in.

However, if you and your Anne Arundel County property management company work together, there are surefire ways to bend the lease terms just enough to entice prospective tenants, without sacrificing your rental property business.

Here are some great examples of lease provisions you can change to encourage an interested tenant to sign a lease with you:

  • Include an early lease termination clause, with a 30-day notice
  • Allow tenants to have pets
  • Permit tenants to temporarily decorate your property
  • Provide the ability to sublet the property under your direct approval
  • Make room for roommates to add themselves onto the lease agreement
  • Allow for a cosigner

If you can be slightly flexible when it comes to lease terms you are normally very strict about, you will open up the tenant pool significantly, and find someone to lease from you much quicker.

 

2. Waive the Application Fee

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Moving is an expensive endeavor. From moving trucks to security deposits, and application fees to utility deposits, your tenant is going to be spending a great deal of money from the get go.

Try lessening the financial burden by waiving simple things like the application fee. This is especially helpful if your property management company requires every adult in the property to submit an application.

The money you will be saving the interested tenant may be just enough to convince them to go with your property, rather than a nearby competitor’s property.

 

3. Give Tenants the First Month Free

This is one of the most popular move-in specials you can offer tenants, and is also one of the most appealing.

As mentioned above, moving is expensive. If a tenant knows that they do not have to pay for the first’s month rent, they may feel less stressed about leasing from you.

Although you lose one month’s rent by offering this incentive, the tradeoff can be worth it. Eleven months of rent payments on a one-year lease is far better than a vacant property generating zero rent payments.

 

4. Online Rent Collection

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Though an increasingly popular method for collecting rent payments among experienced Anne Arundel County property management teams, offering online rent collection is still considered a special incentive.

Many people will jump at the convenience of being able to pay their rent online. By saving time, checks, and the headaches that come with mailed rent payments, your potential tenants may be more willing to rent from you if you offer them the chance to pay their rent online.

 

5. Property Upgrades

Sometimes all it takes to get an interested tenant to move into your rental property is the promise of an upgrade.

Tenants move into rented properties in hopes of making them feel as close to home as possible. This means many will be excited to learn that a permanent and beneficial change will be made to the property upon move-in.

Here are some things you might consider upgrading in order to get a high quality tenant moved in as soon as possible:

  • New, modern, or matching appliances
  • A fresh coat of paint
  • Upgraded flooring
  • Additional parking spaces
  • Bathroom remodels
  • Paid landscaping services

These are just some of the many things you can offer potential tenants in hopes of convincing them to sign a lease agreement with you. And remember, upgrades don’t always have to break the bank.

Oftentimes even small changes are enough to make a tenant feel special.

 

6. Rent Decrease

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If you are in a tight spot and need to place a tenant quickly, one great move-in special you might offer is a decrease on the asking rent.

Again, you will lose some positive cash flow by lowering your asking rent; however, a leased property is always going to make you more money than a vacant one.

 

7. Offer a Welcome Package

Offering your tenants a welcome package is a great way to build a better relationship, make your tenant feel special, and even encourage them to renew their lease come the end of their term.

In your welcome package, you can offer some generous and thoughtful things such as:

  • Gift cards to nearby restaurants
  • Bathroom staples
  • Kitchen baskets with goodies
  • Tickets to a local sports game
  • Plants to decorate their home
  • Coupons to nearby attractions

Encouraging tenants to move into your Annapolis rental property can sometimes prove challenging. However, whether you’re faced with stiff competition, the wrong time of year, or nearby construction, there are ways around all of it to secure a tenant in your property.

Try offering your potential tenants some of the above-mentioned move-in specials and see how that changes their tune.

And be sure to get Bay Management Group on your side to help advertise your property via multiple channels, to draft flexible lease agreements that satisfy both you and your tenant, and even to collect rent payment online.

 

Contact us today, and see how we can get your Annapolis property leased in under 30 days on average.

How to Determine Tenant Damages Vs. Wear and Tear

Posted on by Bay Management Group

how-determine-tenant-damages-versus-wear-tear

Every rental property owner in the Philadelphia region has had to contend with the term “normal wear and tear” at some point.

While seemingly self-explanatory, the truth is that understanding what constitutes normal wear and tear in your rental property, and what equates to actual damage, is much more difficult than you likely anticipated. And, chances are, the line that exists between normal wear and tear and damage will result in some pushback from your tenants.

In fact, most landlord-tenant disputes arise at the end of the lease term, immediately after move-out.

Why is this?

Because at the time of move-out, your Philadelphia property management company combs through your property, documenting every instance where the tenant has “damaged” your rental property, all in hopes of providing you compensation for the damage.

However, many tenants become furious over claims of damage and refuse to pay up, thus creating a huge financial dispute.

Because this is such a sensitive issue amongst both property owners and tenants, today we are going to:

  • Review the differences between normal wear and tear, and tenant damages
  • See what role your tenant’s security deposit plays in the grand scheme of things
  • Offer some ways you can help prevent damage disputes in the future

 

What is Normal Wear and Tear in Your Philadelphia Rental Property?

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Unfortunately, there is not one definitive definition of what constitutes “normal wear and tear” in rental properties in the United States. In fact, it is the multiple definitions floating around that cause much of the confusion.

The following have been noted as true definitions of “normal wear and tear:”

  • “…unavoidable deterioration in the dwelling and its fixtures resulting from normal use,” as defined by uslegal.com
  • “The inevitable physical decline of the condition of a property from time and usage,” as seen here on Investopedia

Though most definitions appear very similar to the two mentioned above, there is no doubt that the term “normal” is highly subjective, and thus, becomes the point of contention in many security deposit disputes.

Examples of Normal Wear and Tear

All rental properties will experience some deterioration as tenants reside in them. This is the nature of living in a property for a period of time.

Here are some commonly accepted instances of normal wear and tear you might notice during your rental property’s move-out inspection:

  • Worn flooring, whether carpet, tile, linoleum, or hardwood
  • Faded or cracked paint
  • Warping of doors and windows
  • Cracked light switch plates
  • Worn or loose door hinges
  • Loose grout or tiles on countertops
  • Partially clogged sinks
  • Dusty blinds
  • Nail holes in the wall from hanging pictures/art
  • Loose faucets

As you can see, these issues can easily attribute to the normal, everyday use of your rental property by high quality tenants who maintain the property as though it is their own.

 

So, What Is Considered “Tenant Damages?”

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Just as with “normal wear and tear,” defining the term “tenant damages” can be equally as frustrating and challenging.

Here are the definitions most often provided to property owners, as clearly stated by All Property Management. “Tenant Damage” is:

  • The loss or harm to property caused by excessive abuse or misuse
  • Misuse or neglect that results in reduced value, usefulness, etc. of the property

The problem with these definitions is this: it is nearly impossible to prove whether your tenant excessively misused or abused your property to the point that their neglect actually reduced your property value, overall profits, or usability of the property.

Examples of Tenant Damages

However, as a property owner, you can make the argument that the following are obvious misuses of the property, and, are in fact, damages caused by the residing tenant:

  • Stained or burned carpeting
  • Tears in the linoleum
  • Unauthorized painting
  • Torn or missing curtains or blinds
  • Broken windows or missing screens
  • Clogged or damaged toilets
  • Smoke marks from smoking or candle burning
  • Broken cabinet doors
  • Large holes or dents in the walls
  • Neglected landscaping that requires complete replacement

Here, you will notice that the severity of damage has increased dramatically from normal wear and tear with these examples. Therefore, as a property owner, you can make a solid case that these scenarios are tenant damages, as opposed to simple wear and tear.

 

When Can You Deduct From Your Tenant’s Security Deposit?

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There are strict rules in place that your Philadelphia property manager should know and understand when it comes to the collection, management, and use of your tenant’s security deposit. If you are self-managing your rental properties, it is crucial you become familiar with the rules and regulations regarding security deposits.

However, in general, if you can make the case that your tenants actually damaged your rental property, you can deduct from their security deposit the amount required to repair the damages that exceeded normal wear and tear of the property.

 

How to Prevent the Normal Wear and Tear versus Tenant Damages Dispute

Prevention is usually the key to avoiding most issues with your rental property. Here are some critical things you can do as a property owner to prevent facing contention with a tenant disputing your damages claim.

Conduct Thorough Move-in and Move-Out Inspections

Thoroughly documenting the state of your rental property when your tenant moves in and out will help best determine whether there was damage done to the property.

You should keep written and photographic documentation, if possible, so that if a dispute finds its way to court, you have ample evidence to make your case.

Additionally, giving your tenant the opportunity to fix any damages at the end of their lease term can save everyone involved a lot of money and hassle.

Maintain Your Property at All Times

Throughout the lease term, help your tenant maintain your property. Here are some great tips for doing just that:

  • Provide your tenant with a welcome packet at the start of the lease term that includes ways they can keep up on property maintenance issues
  • Encourage maintenance and repair requests to prevent small issues from turning serious
  • Make sure your tenants know who to contact for all minor and major maintenance issues
  • Conduct routine inspections of both the interior and exterior of your property throughout the lease term, and address any issues right away
  • Make sure to outline in the signed lease agreement your tenant’s maintenance responsibilities

By doing any (or better yet, all) of the above-mentioned tips, you will save yourself a lot of trouble when your tenant moves out of your property. Not only will your property be in better condition, there is also less likely to be a dispute, thanks to the positive relationship you forged with your tenant during their stay.

There is bound to be some wear and tear on your Philadelphia rental property after a tenant moves out. This is the nature of living in a home. However, understanding the difference between normal wear and tear, and actual tenant damage is what is going to help you guide through the move-out process without a hitch.

 

If you do not want to deal with matters related to wear and tear on your Philadelphia rental property, contact Bay Management Group today and have us deal with them for you. Focusing on serving property owners, Bay Management Group has the knowledge, experience, and customer service skills to handle all wear and tear versus damage issues. Moreover, we also manage everything else related to your property such as tenant screening, rent collection, 24-hour maintenance issues, and even legal disputes, if it gets to that point.

Entrust Bay Management Group with your Philadelphia investment property, and save yourself the headache of having to decide whether your tenant has actually damaged your property.

Top 5 Things to Emphasize in Your Tenant Welcome Packet

Posted on by Bay Management Group

things-include-tenant-welcome-packet-baltimore-property-mangement

It is no secret that first impressions are a big deal when it comes to anything business-related.  In fact, the impression you give your Baltimore City tenants upon first meeting them may just have enough of an impact to convince them to renew at the end of their lease term.

So why not put your best foot forward and really “wow” your tenants upon move-in?

Providing your new tenants with a welcome package as they accept the keys to your Baltimore City rental property can help set the tone for the rest of the lease term.  It is a friendly gesture and helps build a solid relationship between you, your property management company, and new tenants.  It can even help your tenant navigate through minor issues throughout the lease term.

In all, putting together a simple tenant welcome package isn’t going to cost you much and will not take that much effort, yet it can end up being one of the best things you ever do for your tenants as they take that first step into your investment property.

Today, we are going to look at some key things to include in your tenant welcome packages, as recommended by Baltimore’s best property management company, Bay Management Group.

 

Important Things to Include in Your Baltimore City Tenant Welcome Package

 

1. Vital Contact Information

Before your new tenants move into your rental property, ensure they have all the contact information they could possibly need throughout their lease term.

In fact, discussing this information directly with your tenants, as well as including it in your tenant welcome package, will help clarify for them exactly who and when to call regarding general inquiries, maintenance issues, and emergencies.

Detail for them in the welcome package information, such as names, phone numbers, emails, and office hours.  Make sure to set clear expectations for your tenants from the start, so they understand what type of responses to expect from each point of contact.  In addition, consider forwarding this contact information to them via email, should your tenant prefer communicating that way.

Giving your tenants necessary contact information ahead of time will help them in times of need and lessen the stress and hassle everyone experiences when a serious maintenance issue or emergency happens.

 

2. The Paperwork

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No one wants to deal with excessive amounts of paperwork.  However, including all of the important documents your tenant should have during the lease term in a small binder in your welcome package is a great idea.  Here are some things to add to your paperwork binder:

  • A copy of the signed lease agreement
  • Rent payment procedures outlining how much to pay and when
  • Utilities included with the rent and the ones your tenant is responsible for, along with contact information for setting the utilities up
  • Maintenance and repair request procedures, including who to contact and how, especially if your property management company requires specific forms to be filled out
  • Move-in inspection papers and scheduled routine inspections that you plan on making
  • Any important restrictions you would like to emphasize, such as decorating rules and pet policies

 

3. All Small Necessities

One of the best ways to become a successful landlord is to provide your tenants with everything they need right at move-in.

So, why not add these small items in your tenant welcome package so that you know for sure your tenant receives them, as suggested by Rentalutions:

  • Give your tenant all the keys to your rental property immediately upon move-in.  This way, you don’t end up with a call in the middle of your day off because your tenant doesn’t have a key to the backyard shed.  House keys, pool keys, shed or storage unit keys, and any other keys that could be used while residing in your property should be given as a set to your tenants.  It is also a good idea to have the number of keys and what they are used for documented in the written lease agreement, so your tenant knows exactly what is to be returned at the end of the lease.
  • Gates, alarms, garages, and even pool or gym rooms often require codes to access them.  Make sure any codes your tenants need to know are clearly written down and included in your tenant welcome package.  After all, your tenant wants to live in your property because it is safe and secure, among many other things.  Not being able to enjoy this security because you fail to provide the codes to them is a poor customer service move on your part.  Plus, it can cause a lot of frustration for your tenant when they realize they don’t have the code to access something important.
  • Sometimes the neighborhood gate or garage door requires a remote control, and making sure you give your tenants the proper openers upon move-in will prevent problems in the future.  After all, a tenant that cannot access the garage, especially at move-in time, is going to be a problem.

Save yourself a great deal of hassle, and include all the small necessities your renter needs in the tenant welcome package to ensure nothing is overlooked or forgotten.

 

4.  A Gift Card to a Local Restaurant

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One great thing to add into your tenant welcome package is a gift card to a local restaurant.  Moving is tough and is often very time consuming.  Think about it: How many times have you moved into a new home and had everything put away by the end of the first day?  We’re guessing your answer is “never.”

And even if you did, by some miracle, get everything put in its place on the first day, who really wants to cook after a long day of moving and organizing?

Giving the gift of dinner to your new tenants is a sweet gesture that shows you care.  Not only that, but it gets your tenants to one of the nearby amenities you surely promoted while your property was vacant; one that is sure to convince your tenants that their new rental home is in a prime location.  Can you say lower turnover rate?

 

5. Other Great Options

In addition to getting your tenant settled in with all of the important contact information, small necessities, and dinner for the first night, you might want to consider adding some of the following items in your welcome package:

  • A handwritten welcome letter and an information packet that includes local amenities, such as restaurants, schools, places of entertainment, and nearby stores
  • Bathroom staples, such as toilet paper, bar soap, tissues, and even a curtain liner so that your tenants can freshen up after a long day of moving without having to rummage through moving boxes
  • Cleaning items, such as a mop and bucket, broom, toilet bowl scrubber, and an all-purpose cleaner
  • Kitchen items, such as coffee mugs and coffee or tea, baked goods, a box of donuts for their first morning breakfast, or even a nice appliance such as a toaster or blender
  • Plants that are easy to care for, don’t typically flower, and are hard to kill

 

In the end, offering your tenants a welcome package that not only provides the important things like keys to the property, gate codes, and contact information, but fun and helpful things like coupons, gift cards, and bathroom staples can go a long way when it comes to your new tenants’ impression of you and your property management company.

If you are looking for an experienced property management company in Baltimore City that also provides great management tips, such as giving new tenants a welcome package, look no further than Bay Management Group.

Not only do we have Maryland’s top property managers, we are also knowledgeable in how to quickly and efficiently handle all tenant issues, and take all stress away from our Baltimore City property owners.

10 Tips for Preparing Your Rental Property for Winter

Posted on by Bay Management Group

preparing-rental-property-winter-marylandUnless you live in a tropical locale, there is no avoiding the fact that it is winter—complete with icy roads, frozen pipes, and the requirement that you wear mittens and earmuffs just to make it to your car without freezing.

With that said, the time is now to start paying close attention to your rental properties.  After all, cold, wind, snow, and ice often show no mercy and have the potential to cause a lot of damage to your property.

How should you prepare your rental for the winter ahead?

 

10 Things Landlords Can Do Today to Prepare for the Coldest Months of the Year

10-things-maryland-property-managers-prepare-winter-rental-property 1. Prune Your Yard

Snow and ice have a tendency to weigh down trees and large shrubs causing them to break quite easily.  If you value the landscaping you have worked so hard to maintain throughout the rest of the year, scan the perimeter of your property and trim any hedges, shrubs, or branches that may be vulnerable to the upcoming snowstorms.

2. Seal the Cracks

Snow and ice can easily pool in your property’s walkways or driveways as it thaws from the “warmer” afternoon sun.  Then, when temperatures drops again in the middle of the night, this water will freeze and expand, causing even more damage to the already-existing cracks.  This eyesore will need fixing at one point or another to maintain your property’s appeal, so handling it when it is minor is the best option.

In addition, this excess frozen water will make your tenants more susceptible to slip and fall, which is a safety hazard that you could potentially be liable for.

3. Winterize the Sprinkler System

In addition to pruning your yard, it is important that you winterize your property’s sprinkler system to prevent water build-up in the pipes that leads to freezing and possible bursting.  If you are not sure how to do this, enlisting the help of a professional will be minor in terms of cost as opposed to re-doing your entire sprinkler system come springtime.

4. Wrap the Outside Pipes

While you are winterizing your sprinkler system, it is recommended that you or your tenants wrap any non-insulated pipes that may be vulnerable to the cold.  Frozen pipes easily burst and can create a major water damage crisis.  In addition, detach any garden hoses from their spigots and drain them of excess water to prevent them from freezing.

5. Care for the A/C and Heating Systems

Living in an area with lots of snow that can potentially cover an outdoor A/C system is dangerous to your pocketbook.  Safeguard your A/C unit by clearing away any debris and properly covering it.  This way, when the warmer months come, you can kickstart the unit easily.

Additionally, prepping your property’s heating system before the dead of winter is a good idea.  You definitely don’t want your tenants to go without heat in the middle of the winter because of a faulty heating system.  These types of maintenance calls increase significantly during the winter, so getting a professional to service the system quickly may be difficult.

Something you can encourage your tenants to help with is to replace any required system filters and ensure all vents open and close properly.

6. Clear out the Ducts

It is suggested that all property owners have their rental property’s ductwork cleared out every few years.  Since debris can build up over time and strain both the heating and A/C systems, you will want to vacuum that mess out so air can flow smoothly throughout the property.

7. Inspect the Chimney

If your property has a chimney, it is likely that it hasn’t been used since last winter.  Have a professional inspect and clean your property’s chimney before your tenants use it for the first time.  Not only is a dirty chimney unsightly, it quickly becomes a health and safety hazard if not cared for properly.  Make sure there is no debris build-up within the chimney and ensure everything is in working order before allowing tenants to light a fire.

8. Conduct a Window and Door Inspection

In order for your rental property to stay warm for your tenants, you must check to see that heat is staying within the home and not seeping through any loose caulking, torn weather stripping, or gaps in both windows and doors.  Not only will this keep your tenants warmer throughout the cold and snowy months, it will save them on their heating bill.

9. Plan for Snow Removal

Property owners have their own way of dealing with snow removal.  Some do it themselves, some employ a professional snow removal service, and some may even require that their tenants take care to remove snow as needed.  Whatever the case may be for you, have a plan in place before the first big snow.  This way everyone is aware of their individual responsibilities when it comes time to remove snow.

10. Check Safety Alarms

One thing many property owners fail to do, or fail to have their tenants do, is regularly inspect fire and carbon monoxide alarms.  Although it should be outlined in the lease agreement that your tenant is responsible for maintaining working alarm systems, it is not a bad idea to remind them during the winter months to check on them for added security.

This is especially important when it comes to carbon monoxide poisoning.  It is not unusual for tenants to keep all windows and doors shut tight throughout the entire winter season, especially if located in an extremely cold region.  This makes carbon monoxide detectors more important than ever since the lack of fresh air flowing through the property creates more of a risk should a leak occur.

 

Winter will be in full force before you know it. That is, unless you are already experiencing the cold, wind, snow, and ice that is winter.  Making sure to prep your rental properties before the cold snap attacks is the best way to ensure that your property remains as damage-free as possible and your tenants remain as warm and safe as possible.

Though there is always the possibility that something may occur during the cold wintry season that you could not possibly have forecasted, preparing for what you can now will ultimately save you time, stress, and money.

You Banned Pets in Your Rental, But What About Service Animals?

Posted on by Bay Management Group

service-animal-montgomery-county-rental-propertyAs a Montgomery County rental property owner, you are entitled to implement your own pet policies.  In other words, you get to decide whether to allow your tenants to have pets while residing in your property.

But what if you have decided not to allow pets in your rental property and one of your tenants has a service animal? 

Rather than face charges of housing discrimination, you and your Montgomery County property management company should work to become educated with the federal, state, and local laws regarding service animals in rental homes.

The bottom line is this: the law states that you must allow service animals in your rental home, regardless of how you feel about pets.  Because of this law, today we will look at the different types of service animals and how this “reasonable accommodation” is bound to affect you when it comes to placing a tenant with a service animal in your investment property.

 

What is a Service Animal?

According to the Americans with Disability Act, a true service animal is defined as a dog that has been trained to assist its owner with a disability.  In addition, any tasks the dog performs must be directly related to the person’s disability.  Examples of tasks service animals may perform include:

  • Assisting owners who are blind with navigation
  • Alerting owners that are deaf of people or sounds
  • Providing non-violent protection or rescue work
  • Pulling a wheelchair
  • Assisting owners during a seizure
  • Retrieving items such as medicine or the phone
  • Alerting owners to allergens
  • Providing owners with physical support and stability

A service animal will have special certification that training has been completed, proper documentation identifying the animal as a service animal, and will typically wear an identification harness or collar.

But What About Companion Animals?

Companion animals, otherwise known as emotional support animals, are animals that simply provide comfort to the person they are assigned to.  And, while studies have shown that companion animals have a positive effect on people suffering from anxiety, depression, and post-traumatic stress, since they have not been trained to perform a specific task, they are not considered “true service animals” under ADA rules and regulations.

However, this does not mean property owners like yourself can prevent companion animals from residing in your property.

 

Disabled Tenants, Service Animals, and the Law

disabled-tenants-montgomery-county-rental-propertyIn addition to the rules outlined in the ADA regarding service animals, the Fair Housing Act and Housing and Urban Development (HUD) treat both service animals and companion animals the same.  Here are the conditions that your tenant must meet in order to require you to allow the companion animal into your investment property:

  • The tenant must have a diagnosed disability that impacts major life activities
  • The tenant must have a disability-related need for the animal and the animal must fulfill those needs

So long as those two conditions are met, you are legally obligated to allow a companion animal into your rental home despite it not being a true service animal.  Even if you have a “no pets allowed” policy in the lease agreement, tenants with companion animals are allowed to have them in your rental.

Both the ADA and Fair Housing Act (FHA) have strict rules in place to prevent discrimination against tenants with disabilities that require service animals.

In fact, both statutes together maintain that property owners must provide reasonable accommodations to any tenant requiring a service or companion animal while leasing a rental home.

In order for a tenant to qualify for reasonable accommodations for their disability, including the allowance of a service animal, they must fulfill the following conditions:

  • Have a physical or mental impairment that substantially limits one or more major life activities (such as walking, seeing, working, cleaning, dressing, and so forth)
  • Have a history of such impairments
  • Be regarded as having such impairments

Because you are limited when it comes to the information you can require your tenant to disclose, these rules and regulations become difficult to follow.  Many states have taken further action in protecting those with disabilities to ensure they receive fair housing opportunities.

 

Property Owners and Service Animals

illegal-discrimination-tenants-needing-service-animal-montgomery-county-rental-property.If a prospective tenant has a disability and requires a service or companion animal, you and your Montgomery County property management company are not allowed to discriminate against them.

Take a look at the basic guideline property owners and their property management companies must follow when it comes to allowing service or companion animals into your Montgomery County rental home:

  • Service animals are not considered pets, therefore any “pet policy” in place does not apply
  • Service animals are allowed wherever the disabled person goes, including establishments with restricted animal areas
  • Property owners cannot collect pet deposits or charge additional monthly fees for service animals
  • There are no breed restrictions or weight limits allowed
  • Property owners can request written verification from a tenant’s healthcare provider that they are disabled, but cannot ask for specifics regarding the disability
  • Property owners can request written verification from a tenant’s healthcare provider that the service animal is medically necessary
  • If a service animal is disturbing others, posing a threat, or damaging property, a property owner can write warnings or evict a tenant with a service animal
  • Any damage caused by a service animal is the responsibility of the tenant and can be deducted from the security deposit at the end of the lease term
  • Property owners can request a service animal’s health records to ensure good health and updated vaccinations

Common Problems Property Owners Face with Service Animals

Due to the restrictions in place regarding verification of both disability and service animal necessity, many property owners find themselves confused when it comes to dealing with tenants requesting reasonable accommodations for their service animal.

Below are some of the issues you may be faced with:

  • The ADA has no clear guidelines on the size, breed, or number of service animals that are allowed in rental properties
  • There are no rules regarding how a tenant chooses a service animal
  • Though training and certification is often the norm, there are no requirements surrounding training, socialization, or behavior of service animals
  • Property owners cannot question the level of training a service animal has received
  • Anyone qualified to treat a disability can prescribe a service animal, and receiving written verification is an easy process
  • Property owners cannot suggest other options for treating a specific disability to avoid a pet residing in their property

There are a few instances where you may be able to deny the presence of a service animal in your Montgomery County home.  However, you and your property management company should be very careful to avoid housing discrimination in doing so.

  • The tenant is not legally disabled and cannot prove in writing he or she is
  • The service animal will create an undue burden on the rental
  • The service animal is otherwise illegal to own in the United States or at the local level (g. it is an exotic or dangerous breed)
  • The service animal creates an undue financial burden on the property owner
  • The tenant refuses to take responsibility for the service animal while in the rental

In the end, regardless of your Montgomery County rental property’s “pet policy,” there are instances where you must legally allow pets into your home.  And, while there are some small measures when it comes to verifying the validity behind a disability claim, you must be very careful not to overstep your boundaries and discriminate against tenants with disabilities.

 

In order to avoid getting yourself into legal trouble when it comes to prospective tenants with disabilities requesting to bring a service animal into your rental property, consider employing Maryland’s leading property management company to handle that for you.

Knowledgeable in all rental property rules and regulations, at both the federal and state levels, you can rest assured Bay Management Group will not discriminate against any potential tenants.  In addition, you can feel confident that due diligence will be done in order to fully verify any prospective tenant’s disability and need for a service animal.

And that’s not all!

Bay Management Group is equipped to handle all of your property management needs from tenant placement, to lease drafting, to rent collection and eviction procedures.  Working solely in property management, Bay Management Group has what it takes to handle the daily grind when it comes to your rental property. So, contact us today and see how we can help take some of the burden off you so you can enjoy your life and the benefits of your rental property business, without all the hassle.

Why Landlords Shouldn’t Try to Manage Their Own Properties

Posted on by Bay Management Group

Managing Your Own Rental Properties Takes a Great Deal of Organization and Multi-Tasking

Deciding to start your own Montgomery County rental property business is an exciting time. There is so much that goes into investing in your first property, placing your first tenants, and of course, managing your first rental property.

And, if you choose the hands-on approach and decide to manage your own property, you get to take the front line and have an active role in all things management and maintenance when it comes to your rental home.

 

There are plenty of benefits to managing your own property:

  • You have direct control over everything that takes place in your rental
  • You are in constant contact with your tenants
  • You may save a little cash avoiding property management fees

 

However, there are many more benefits to handing over the large responsibility of managing your Maryland rental property to a highly qualified property management company such as Bay Management Group. In fact, you can even be a seasoned property owner and reap the benefits of a property management company caring for your investment properties.

 

Today we will explore the reasons why you should not attempt to manage your own Montgomery County investment property and how handing the reigns over to the experts will save you time, money, and plenty of headaches.

 

The Downsides to Managing Your Properties

The prospect of hiring a property management company to manage your investment properties can be a daunting one. Though it can be appealing to think of someone handling the day-to-day administration of your rental property business, it is not always easy to hand over something as important as managing your rental property.

 

However, with a little due diligence and a lot of research, you will find that employing a quality property management company is typically the best choice. In fact, here are some convincing reasons why you should not consider managing your own Montgomery County rental properties.

 

You Do Not Have the Right Expertise

If You Lack the Expertise, Managing Your Own Rental Properties Will Be Very Difficult, Maybe Impossible

If you want to get into investing in real estate but have no experience in the field of property management, it is wise to leave that up to the professionals. Learning as you go can be highly ineffective and end up costing you a great deal of time and money in the long run. By attempting to manage your own properties you run the risk of:

  • Hiring the wrong vendors to make repairs, which can become costly and time-consuming
  • Using ineffective advertisement that can lead to longer vacancies
  • Violating Fair Housing laws or becoming a victim of alleged discrimination that can land you in court
  • Improperly screening tenants, which makes for trouble tenants
  • Implementing poor rent collection policies that can dig into your bottom line

The truth is, if you have no experience in managing a rental property, you should not start doing so with your own costly investment property.

 

Managing over 1000 units in the Baltimore-Washington D.C area, Bay Management Group has years of in-depth property management experience. Less than 1% of all placed tenants are evicted under the management of BMG. This is because of their strict tenant screening and placement procedures. Plus, being broker-owned and locally operated, Bay Management Group is educated in all things property management and is actively involved with all of their properties.

 

Your Portfolio is Growing

With a Growing Portfolio of Investment Properties, It Will Become Harder to Manage Them On Your Own

As your portfolio of Montgomery County properties increases, so do your responsibilities. Since many people get into the rental property business to make passive income to fund vacations, pay off debt, and even replace their corporate income, they tend to want to increase the amount of properties they own and make them available for lease.

The problem is, the more properties you own, the more tenants, administrative duties, and problems you encounter. Owning multiple properties will never yield a true “passive” income if you choose to manage the properties on your own. Your time commitment will increase significantly the more properties you have and you will end up sacrificing many of the following:

  • Your job. If you are a full-time employee seeking to build a strong rental property business, balancing both by managing your own properties is going to take some serious luck. Either your career or properties will begin to suffer over time, possibly leading to the downfall of one or the other.
  • Your family. If you have a lot of extended family you spend time with or small children at home, managing your own properties is destined to cut into family time. Late night maintenance emergencies, long days at the office dealing with paperwork and tenant placement, and day-to-day communications with tenants can eat into family time.
  • Your social life. Just like your family time, any type of social life you have will likely be interrupted if managing your own properties. Your tenants deserve the best treatment and managing your own properties cannot be performed at your convenience. This means being prepared to bolt out the door at any moment to take care of something property-related.
  • Your free time. Many adults crave the elusive “me time” that seems to dwindle as families grow, careers boom, and life happens. If you are on-call to manage your Maryland properties, you may find what little bit of free time you have for yourself again being taken away due to plumbing issues, non-payment of rent, and property showings, just to name a few.

 

Enlisting the help of a property management group that is on call 24/7 will diminish this loss of time, leaving you room to build a bigger career, enjoy family holidays, get social with your friends, and even enjoy that book you have been trying to find time to read. Plus, you will reap the rewards Montgomery County properties bring in, all with very little effort on your part.

 

Your Personality Does Not Click With Others

Customer service is a major component that property management companies focus on in order to gain customers and retain tenants. If you are not the type of person that wants to deal with the headaches that come with evictions, complaints, and maintenance requests, you should not manage your own rental properties.

Property managers, like the ones at Bay Management Group, are well-versed in how to deal with even the toughest of tenants. They understand the landlord-tenant laws, can buffer any issues your tenant has with your property, and pride themselves in being able to diffuse any complaints or issues that arise.

 

For Those That Need More Convincing

If you are still not convinced that employing a property management company is the right decision for you, check out these other reasons why managing you own properties may not be your best option:

  • The location of your properties span far and wide, requiring extensive travel commitments
  • The condition of your property is not pristine, which means repair requests may be regular and often-occurring
  • You are unsure how to add extra curb appeal to your properties to attract high-quality tenants
  • You don’t know how to draft legally-compliant lease agreements with the provisions you want

 

Altogether, hiring a property management company such as Bay Management Group to manage your Montgomery County rental properties far outweighs the benefits that come with managing properties on your own. With the lowest monthly management rate in the region, a 12-month tenant warranty in place, and a support staff of over 20 people, you can rest assured you will save money and your property will be well-cared for with Bay Management Group.

 

In addition, services such as tenant screening, vacancy advertisement, lease drafting, an on-the-clock maintenance staff, and in-depth knowledge of the Montgomery County market are what Bay Management Group provides their property owners. Contact us now and see how Bay Management Group can help take a load off your plate and give you the peace of mind you’re looking for with your rental property investment.

Top Considerations if You Need to Fill Your Vacant Rental Property Quickly

Posted on by Bay Management Group

Speed vs. Quality: Interviews and Screening Tenants

Be Sure to Properly Screen Your Potential Tenants To Avoid Problems Down the Line

Most landlords dream of filling a vacancy almost immediately. But, when trying to put someone into their empty properties as quickly as possible, they often ignore proper screening processes.

If you don’t go through the proper screening and interview process, the tenant may end up violating the terms of the lease, which will result in you having to eventually evict the tenant.

No landlord enjoys evicting tenants. The eviction process itself can take months, and you likely won’t collect any rent during that period. Thus, be sure you don’t discount the long-term benefits of taking your time to put a quality tenant in your rental property.

 

Traditional Marketing Not Working for Your Rental? Think Outside-the-Box

Consider Non-Traditional, Outside The Box Marketing Options To Fill Your Vacant Rental Property Quickly

  • Word of mouth. Try to encourage your other current tenants to spread word that you have vacancies. You can even offer referral bonuses if they do, such as half-off the next month’s rent.
  • “For Rent” signs. It might seem silly, but putting up signs in front of your rental will capture the attention of local traffic. Even if the person who sees it doesn’t want to rent from you, they may know someone who does.
  • Online listings. Websites such as Zillow and Craigslist allow you to post your rental property listings for free. You can also take advantage of free online classifieds and other listing sites for Baltimore County.
  • Real estate offices. Many larger real estate offices handle rental properties, but be aware that they’ll often charge you a fee that varies depending on your location.
  • A Baltimore County property management team. A local property management company such as Bay Management Group can take over the duties of marketing your vacancies, as well as many other unwanted landlord tasks.

 

Consider Opening Your Rental to Section 8 Housing

The term “Section 8” refers to renters who qualify for the government’s Housing Choice Voucher Program.

People who qualify have a very low income and receive help to afford their rent. The government pays anywhere from 33 to 75 percent of their rent.

While it is illegal to discriminate against tenants for reasons outlined in the Fair Housing Act, it is important that all income property owners fully understand the program and how it may work for their rental.

 

Benefits

A Pro to Opening Up Your Rental Property to Section 8 Housing is Guaranteed Rent

  1. Guaranteed rent. The percentage of the tenant’s rent covered by the government will arrive on time every month via direct deposit.
  2. Low-priced marketing. Many websites offer property listings for a low fee. They’re frequently visited by Section 8 tenants, so it’s an effective way of placing renters in your properties quickly and inexpensively.
  3. Potentially higher rental rates. In general, the rent you can ask from a Section 8 tenant often exceeds what you get for low-income housing.
  4. Shorter vacancy periods. Many cities have lists with a great number of Section 8 participants seeking housing. If you file a vacancy on a property that has already been inspected and approved for Section 8 housing, you’ll very quickly fill the spot.
  5. Long-term tenants. Many Section 8 tenants stay in the same rental properties for a long time. They typically sign one-year lease agreements wherever they go, but oftentimes stay for much longer. They’re allowed to move, but they’re required to notify the Housing Authority, provide you with proper notice, and find a new home before they’re able to do so.

Concerns

  1. No damage compensation. If a Section 8 tenant damages your property, you won’t receive any damage repair money from the government. The tenant’s voucher may be revoked as a result of damages caused to your property, but you won’t see any compensation for your losses.
  2. Additional occupants. Section 8 tenants are more likely to allow long-term guests such as family members and significant others to live with them. These extra occupants cause extra wear and tear on your property and aren’t legally allowed to live there under Section 8 rules.
  3. Strict property guidelines. Section 8 will not pay you any rent until they’ve inspected your property and approved it. Fortunately, their guidelines are fairly straightforward – but strongly enforced. If you fail your inspection, you have 30 days to make whatever necessary repairs before they’ll perform another inspection.
  4. Section 8 is often understaffed. As a result, minor clerical errors are commonplace. You may have trouble contacting Section 8 offices and filing claims.

 

Filling a vacant rental property in a rush can be stressful and it may be tempting to cut a few corners to move the process along quickly. However, it is essential that every rental property manager or owner adhere to a routine screening process with each potential tenant.

Always do your due diligence before approving a tenant’s application and think about the long-term relationship you will have with these tenants.

If the thought of this is overwhelming and you would like to enlist the help of a professional to aid in this process, contact Bay Management today to help you with all aspects of managing your rental properties.

 

 

4 Rental Property Upgrades That Waste Your Time and Money

Posted on by Bay Management Group

Some Upgrades to Your Rental Property Are Not Worth the Time and Money

Investing in a Montgomery County rental home often means getting a great deal on a property that needs some TLC. With the overall goal to make your investment property appealing in order to get the highest rent rate possible, it is sometimes necessary to go beyond fixing the required damages that exist; sometimes you need to take it to the next level and update and renovate your property for added allure.

 

Keeping upgrade costs low while greatly improving your Montgomery County rentals should always be your long-term rental strategy. However, having a budget and planning for the right upgrades are what will make you the most money in the long run.

 

Today we will look at some strategies to use in your decision of whether to upgrade your newly acquired rental property. In addition, we will discuss four upgrades that are in fact a waste of time and money and are unnecessary for you to make in order to maintain a positive cash flow.

 

Should You Upgrade Your Montgomery County Rental Property?

When you purchase an investment property that needs some extra attention, oftentimes the biggest decision will be to what extent you should upgrade or renovate the property’s current condition. And no, we are not talking about required repairs needed to provide a safe and habitable home for your future tenants. Rather, we are talking about modern improvements made to the property that add extra charm and allow for higher monthly rent rates.

Here is a sample list of important things you ought to consider before making the decision to renovate your Montgomery County rental:

  • Cosmetic upgrades are the most noticeable improvements and the ones tenants are likely to appreciate – thing such as fresh paint, new flooring, and attractive landscaping
  • Appliances are another rental home hotspot – ENERGY STAR appliances are preferred and modern styles are the most attractive
  • The condition of your property’s windows and doors influence a tenant’s decision to rent because they can be seen from both the inside and outside of the home

Of course, the above is not a comprehensive list of things to consider before deciding whether to make upgrades to your investment property. Rather this list gives you a general idea of what to think about before embarking on the journey of renovation.

 

4 Montgomery County Rental Upgrades That Are Not Worth It

4 Rental Property Upgrades That Are Not Worth It

Although upgrading your Montgomery County rental property can have many benefits, the truth is that some things are better left alone. Here are the rental property upgrades that most often result in lost money and time.

1. Landscaping

Curb appeal is a big part of placing high quality tenants in your rental property and securing a solid monthly rental rate. However, investing a lot of time and money into your front and back yards can actually backfire.

If you invest a lot of money into your rental home’s landscaping, you risk these two main things:

  • Possibly turning away potential tenants that may be a perfect fit for your home. Yards are subjective—some tenants may not like an overdone landscaping job, and thus turn down leasing your property.
  • Some tenants may not agree to maintain such an extravagant landscape, forcing you to maintain the landscaping yourself by spending additional money on a maintenance service.

In the end, when it comes to landscaping both your front and back yards, it is best to keep things simple and neat. That way your home is still inviting, but not expensive to stage initially or maintain.

 

2. Closet Renovations

Renovating the Closet of Your Rental Property is Not Worth the Time and Money

Having enough closet space is something every prospective tenant is searching for in a rental home. However, upgrading that welcoming walk-in closet your rental home has will not come cheap. In fact, most people have no idea just how expensive closet renovations are. Estimated to cost upwards of $4,500, a simple closet upgrade can put you deep into the red for a space that is not crucial to the life of your tenants.

Plus, most people are looking for big closets with lots of space. Sure, storage options, built-in organizers, dressing areas, and even closet islands are fancy, but chances are your monthly rent collection will not recoup the cost of investing in a fancy closet for some time.

 

3. Windows and Doors

Renovating Windows and Doors on Your Montgomery County Rental Property is Not Worth The Investment

Remember, windows and doors are seen from both the interior and exterior of the home. That makes them an important part of the overall appeal of your rental home. However, that does not mean you want to foot the bill for completely upgrading them.

Changing out every window your Montgomery County rental can quickly become a costly endeavor. Though your old windows may be leaky, drafty, or even just unsightly, it is important to carefully consider the cost of replacing them. Get a professional to evaluate the condition of your windows before deciding to what extent you will renovate them. Who knows—you might be able to get away with simply replacing the sashes for visual appeal. In the end, if you can avoid spending tens of thousands of dollars on replacing the windows of a home you don’t get to enjoy yourself, do so.

On that same note, opting to upgrade your front door can be relatively costly as well. Though fiberglass doors are trendy right now, a steel frame door may cost save you $500 and have the same rate of return as the more expensive fiberglass one.

It is best to opt for a front door that matches your rental property’s architecture and will add character to your home. Doing this, rather than shooting for the fanciest thing on the market right now, will add a special charm prospective tenants will enjoy, while also saving you money.

 

4. Hardwood Flooring

Installing hardwood flooring throughout your Montgomery County rental home can definitely make for a nice first impression. However, this type of flooring is extremely expensive and typically requires professional installation, thus costing you more money.

And, while hardwood flooring looks great, many tenants prefer the softness carpet brings, especially in the bedrooms. Plus, if your tenant has children, there is a chance they may prefer carpet in the living areas as well.

In addition, hardwood flooring scratches easily. This means that replacing large sections of flooring each time new tenants take up residence in your home will be necessary. This also means more money out of your pocket will go onto into your flooring budget on a regular basis, which is counterproductive to a positive cash flow.

If you do decide that you need to upgrade your flooring, try a more cost effective type such as laminate, linoleum, or even tile.

 

If you own a Montgomery County rental property that is need of some extra care before putting up for lease, make sure you carefully budget for and plan your renovations. Depending on things such as property location, surrounding competition, and going rental rates, you may not want to invest a lot of extra cash into an already decent property.

If you are new to the rental property business, or find your portfolio growing in size and are in need of a high quality Montgomery County property management company, contact Bay Management Group today. Not only are we experienced in all aspects of managing rental properties, we can also help guide you when it comes to adding extra curb appeal to your rental property. This includes whether to make upgrades or leave well enough alone, and how to price your rental home at the highest rate possible.

Get in touch with Bay Management Group now. With the lowest monthly management fees in town and the ability to take on all that comes with managing your investment property, by using Bay Management Group you will save both time and money and have the peace of mind that your rentals are well cared for and are generating a positive cash flow.

How Many Properties Should You Buy and Manage as a Montgomery County Landlord?

Posted on by Bay Management Group

Rental properties are a great way to invest your money and supplement your income. This is especially true if you are investing in the Montgomery County area. With plenty of properties to choose from in a quickly-growing region with lots of appealing amenities, owning rental property in Montgomery County will provide you a steady cash flow from the start.

But how many investment properties should you commit to owning and managing? 

The answer to this question is not cut and dry. In fact, a number of factors can potentially affect how many investment properties you have in your portfolio. Thus, it is essential you evaluate your own individual situation before making a decision.

That being said, there are some general things all property owners in Montgomery County can consider when deciding the total number of rental properties they would like to purchase and manage.

 

Rental Property Questions To Ask Yourself

Investment properties provide excellent opportunities to build a passive income and fund things such as your bank account, vacations, or even retirement. However, there are several things to ask yourself before investing in every Montgomery County property you find matching your rental needs.

 

Question #1: What Are Your Big Picture Goals?

Be Sure To Know Your Goals Before Deciding How Many Montgomery County Properties You Should Invest In

Many people want to jump right into the rental property business and start making money as soon as possible. The problem is, with no long-term goals in place, it is hard to determine how many properties are needed to meet those goals. Worse yet, not having a basic plan can ruin any goals you may have for the future. After all,

“If you fail to plan, you are planning to fail” – Benjamin Franklin

 

Here are some things to figure out before choosing how many rental properties to purchase:

  • How will you be financing the first property you plan to purchase?
  • Are you looking to supplement your income and keep a full time job, earn enough money for fancy vacations, or secure enough for an early retirement?
  • How much involvement in the management of each property do you plan to invest?
  • What is your exit plan should your rental property business not yield your desired results?

 

Question #2: How Will You Finance Future Purchases?

Getting your first Montgomery County purchase under your belt is one thing; making multiple purchases down the line is an entirely new ball game. You must have a way to finance future purchases. In the end, no matter how many properties you think you should own and manage, you must have enough money in the long term to purchase successive properties.

Here are some ways to save money in an effort to increase the number of property purchases you can make:

  • Regularly evaluate your property value so you know exactly how much equity is built in
  • Research your properties and only purchase ones with positive cash flow
  • Get an interest-only loan and place the excess cash into a separate account as savings for your next purchase
  • Continue saving money just like you did for your first rental property purchase

 

Question #3: How Will You Improve Loan Approvals?

Despite how many Montgomery County properties you want to own, or how much money you want to make each month, the bank has a great deal of control over what you actually do.

Bank lenders want to minimize their risk when it comes to loaning money to investors looking to purchase multiple properties. In order to continue building your portfolio, you need to improve your serviceability and prove to the bank you will pay up each month.

Here are some great ways to convince banks you will follow through on your financial obligations:

  • Increase your income any way you can – take a job promotion or start a side business, and save, save, save
  • Invest in positive cash flow properties – banks tend to approve loans for those receiving positive cash flow each month
  • Get experienced in negotiating with lenders – present all of the reasons you will follow through on your loan obligations and why you make a good investor

 

Question #4: How Much Time Do You Have to Manage Multiple Properties?

How Much Time Do You Have to Maintain Your Multiple Montgomery County Rental Properties?

If you are like many property owners, you have a full time job in addition to your involvement in the rental property business. Owning many properties can quickly become overwhelming if you choose to manage them all on your own. And, if you overexert yourself and spread yourself too thin, chances are your career and properties (including your tenants) will suffer in the long run.

If you aim to own multiple properties, but do not have a lot of time to manage them on your own, one solution is to hire Maryland’s leading property management company, Bay Management Group. The knowledgeable staff at BMG can manage every aspect related to your rental properties. This includes things such as:

  • Vacancy advertisement
  • Tenant screening
  • Lease drafting
  • 24/7 maintenance and repair services
  • Regular property inspections
  • Legal backup
  • Strict rent collection procedures

 

In addition to employing the help of an experienced property management company such as Bay Management Group, you might consider partnering up with someone so that some of the tasks related to your properties are split. In addition, the finances and experience of a well-balanced partner can make your rental property business that much more successful.

 

In the end, the answer to the question regarding how many properties you should own and manage is this: as many as you want, as long as you are willing and able to work for it.

Everyone’s situation will differ and pose challenges along the way when it comes to purchasing multiple rental properties. However, none of these difficulties can prevent you from achieving your goals as long as you educate yourself in the rental property business, have clear goals in mind, and have a plan before jumping right in.

Additionally, you can enlist the help of Bay Management Group to take a lot of the stress of owning multiple rental properties away and make matters even easier to handle.

 

If you are looking to boost your Montgomery County portfolio and add more properties to increase your income, contact Bay Management Group today and see how we can help you manage your multiple rental properties, leaving you room for the fun things in life.