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How to Avoid Scammers

Angry Property ManagerMost warnings and media stories about scams on rental listing sites such as Craigslist focus on helping renters avoid scams, but landlords and property managers are often targeted as well. Here are some of the most common ways in which property managers and landlords find themselves getting scammed — and how they can prevent it. Learning how to avoid scammers is critical to your success.

Three Types of Scams:

Smoke-and-Mirrors Scams

Scammers steal pictures and property listing descriptions from authentic rental listings, and post them elsewhere online to lure renters. The alternative postings include suspiciously low pricing and contain fake email addresses or 800-numbers, which the scammer uses to draw renters in. For the landlord, their legitimate listing is passed over by tenants clicking on the lower price option, and can create suspicions that the legitimate listing is a scam as well.<

Lawsuit Scams

These scams involve real tenants actually signing a lease agreement and moving in – only to invent an excuse for a lawsuit. This could be failure to provide lead paint documentation or really anything that sounds scary and serious. Even if the tenants eventually lose the lawsuit, they can still often live for free while the landlord deals with the suit. Court may put a stay on any eviction proceedings until the lawsuit is decided.

False Check Refunds

Impostors often will pose as renters who agree to pay a security deposit and rent without viewing the property. Then the impostors send fraudulent cashier’s checks in excess of the stated amounts and request that landlords return the overages. After sending a “partial refund,” landlords learn the up-front payments were counterfeit.

How to avoid scammers – here are some ways in which landlords and property managers can guard against these scams:

Limit Information

Publish limited information on the internet regarding yourself and your properties. Post the intersection instead of the full street address. Serious prospects will call, giving you the opportunity to conduct a phone screening prior to divulging sensitive information.

Use An Alternate Phone Number

Never use your cell or home phone in your rental ads. Consider free options such as Google Voice to receive calls on your cell phone without giving away your true phone number.

Conduct A Background Check via Telephone

Always conduct a preliminary background check via telephone prior to showing the property. Scammers will be uncomfortable answering many questions. When doing a more complete screening after showing the property to an interested tenant, be sure to verify their employment, income, credit history, criminal background, and court history. If they have ever sued a landlord, keep searching.

Watermark Your Photos

Watermarking your pictures is one way to prevent picture theft. There are a number of watermark software programs and some free online versions. Do some research to choose the appropriate one for you.

Now that you know some ways to avoid getting scammed, also check out our post on protecting your computer from a cyber attack: http://tfblog.tenantfile.com/2015/10/a-day-in-the-life-of-a-property-manager-post-cyber-attack/

Landlord Articles

Check out this Great New eBook for Landlords

Tenants.com Landlord eBookTenants.com has been making big inroads in the Internet buzz world. They have been consulted by Realtor.com and Trulia.com for opinions and articles that affect tenants. They also have valuable information for landlords. Now, they have just released a new eBook for landlords called “What ALL Landlords REALLY Need to KNOW“.

This 30 page eBook is full of helpful information for landlords, property managers and owners of rental property. We liked it so much that we have provided a link so that we can share it with the Tenant File social media followers.

To get the eBook, just click on this link.

When we come across helpful information for property managers, we want to share it, and hope you will do the same.

Happy Landlording!

 

 

Landlord Articles

Does Your Lease Cover Enough? Check out these ideas!

What Extra Clauses should you add to Your Lease Agreement?

mediatorMany times a basic lease agreement is not enough. There are many other important clauses that many landlords tend to neglect, yet in a dispute they may become very important. Below are some examples of clauses that can be added to your lease agreement.

  • Parking restrictions – how many vehicles (cars, boats, motorcycles, etc) can be parked at the residence?
  • Business use – can the tenants run a business? What kind? Is signage allowed?
  • Garage sales or auctions? Are you going to permit these? How often?
  • Change in status (any changes in the lease application, such as employment)
  • Subletting – is it allowed? How many residents? What notification?
  • Co-signer or guarantor – should you add another responsible party as a guarantor?
  • Partial payment – how is it handled and does it stop any legal proceedings?
  • Returned check fees – how are you going to handle returned checks? What fees?
  • Bankruptcy – what are you legal rights if your tenant files for bankruptcy?
  • Lease violations – what are your rights? What are the tenant’s rights? What jurisdiction?
  • Absence of tenant – what is the tenant disappears? Can you get into the rental?
  • Furniture lien – can the tenant possessions be taken? After what time period?
  • Increase late fees – can you charge additional late fees if the tenant is often late?
  • Judgment collection – who is responsible for the court costs and legal fees?
  • Utility bills – which one of you pays the deposit? What if the tenant defaults?
  • Emergency repair – what if you have to cut off the water for repairs?
  • Problem neighbors – how do you handle complaints?
  • Disasters – what if you can’t fulfill your landlord obligations because of a disaster?
  • Illegal activity – make sure you can take action against drug use, explosives, firearms, etc.
  • Quiet enjoyment – insure that the tenant music or noises do not intrude on other people’s rights
  • Smoking – make sure your rules are clear. Specify restrictions on illegal drugs.
  • Pets – how many pets? What additional deposit? What about additional cleaning costs?
  • Yard upkeep – Make sure your property looks neat and is safe. Protect any large trees.
  • Health and safety codes – Be sure your tenant doesn’t not violate these, and what your recourse may be.

There are other clauses that you may need to add. Just reflect upon any possibly situations that might arise with your particular rental property. With the right additions to your lease, it will help protect your legal rights and avoid future legal complications.

Article author:

Paul Toller works for W G Software, Inc. developers of the Tenant File Property Management Software. He has over 20 years experience in consulting and software development for real estate.

Landlord Articles

How Crowdfunding Has Permanently Changed Commercial Real Estate

Collect $1,100 in Monthly Rent From RioCan Real Estate Investment TrustBehind stocks, bonds and cash, commercial real estate has emerged as the fourth largest asset class in the U.S. over the last few decades. Among institutional investors, investments in commercial properties represent nearly 10% of their holdings.

When you look at the typical individual investor’s portfolio, however, there’s often a big hole where commercial real estate is concerned. In fact, for many investors, this particular asset class is a relative unknown. Previously, stiff barriers to entry meant that direct commercial real estate investments were only available to a select group. Fortunately, real estate crowdfunding is making it possible for a broader base of investors to gain access to this valuable segment of the real estate market.

Commercial Real Estate Explained

In the simplest sense, commercial real estate is any property that’s designed to produce income. That covers everything from apartment complexes and office buildings to shopping malls and industrial complexes. Commercial properties generate income in the form of rent paid by tenants and/or appreciation when the property is sold. Investors realize returns based on the property’s income, less any operating, financing and maintenance costs.

Where Does Crowdfunding Come In?

Historically, commercial real estate investments were the exclusive domain of private investors who had the right connections and could afford a five- or six-figure minimum buy-in. Some of the largest institutional investors in the world (including the Harvard and Yale Endowments) have sizable portions of their portfolio allocated to real estate and this has been a major factor in their superior investment performance. Unfortunately, individual investors have historically been excluded from this potentially profitable asset class.

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Common Sense Property Management Software

Property Manager WorkingCommon Sense Property Management Software

I hear all the time the comment, “I thought my previous software was going to make my life easier, but it just gave me more frustration”. Property management is hard enough by itself without having to struggle with slow software, missing data, constant questions, and a difficult learning curve. We hear from rental property owners every day that are still using spreadsheets to manage their property, or they have purchased a program that is way more than they actually need.

Make sure it works the same way you do

First, if you can’t try out the software before you buy it, run the other way! That is the only way you can be sure it is right for you. When you do try the software, start with one task, such as “I want to charge rent to my tenants”. Then, see how long that task takes. If it is more than 10 seconds, it is too long, even if you have hundreds of rentals. Better yet, look for an option to charge rent automatically without user intervention.

How about this? “I want to update the tenant’s rent amount, and then correct an amount that I accidentally posted to the tenant’s accounting”. Many programs make you navigate to multiple menus to do seemingly easy common sense tasks, so make sure it is easy to correct mistakes.

Other things you might want to look for would be the ability to automatically increase rents on a specific date in the future, the ability to either print checks or transfer via ACH, receive rent online, a way to make automatic payments, and a vendor file that keeps important information on all of the vendors that you work with.

Common sense extras that you might look for would be a reminder system for Owners, Tenants, and Vendors, and a scheduler to help keep track of upcoming repairs, vacations, and notices. You might want to use the reminder to keep track of tenant birthdays so that you can maintain a good relationship with your tenants.

Keep your valuable data with someone you trust – you!

If you keep your own information, it will be safer. Find a program that allows you to make a local backup of your valuable data quickly and easily. It should be as simple as clicking a ‘backup’ button then pressing ‘go’. If not, maybe that software is not for you. Some users prefer web based software, so if that is you, be sure that you can download your important data, and that your valuable information is encrypted and stored on servers with redundant backups. Even then, you could be at risk of a hacker attack that could shut down the servers, so you might consider on-premise software if that is a concern.

Don’t get more or less than you actually need

Another common complaint I often hear is that the customer had previously paid ‘thousands of dollars’ for another complex software, yet they only manage a few rentals. Or, on the other side, they manage over 100 rentals and the software they have is just too limited. Ask the vendor their average number of rentals per user, and the market they strive for. Do they work with owners of rental property or mostly with property managers? You need powerful features in your software without paying too much. At the same time, avoid ending up with overly complicated requirements with features you don’t need.

Common sense assistance

With any new software you need a little help. Avoid companies that don’t provide a phone number or any free support – eventually you will need some assistance. The trend is to not provide phone support, which may mean that you will have to either search a knowledge base for an answer, or wait for a return response to your online support request. Make sure that you can get immediate help through paid phone support.

Follow these common sense guidelines, and your property management software investment will help your business run a lot more efficiently, smoothly, and stress free.

Landlord Articles

Buy A Rental Property To Pay For College: Save On Taxes And Tuition With No Room And Board

With the cost of the priciest colleges now over $65,000 a year, and room and board costs increasing faster than tuition at many colleges, buying a rental property for your child and a couple of good roommates to live in can be a savvy college funding, tax and retirement move.

You can pick up all of the traditional tax deductions from owning a rental property, hire your child to manage the place and use his net income to pay for tuition with little or no tax, while the rent the roommates pay can help pay the mortgage. When your child graduates in four years, and he will, right? Then you can either hang onto the rental and use it as a retirement home once its paid off, or you can do a 1031 exchange, deferring the tax on the capital gain so long as you buy another “like-kind” property, possibly in a location you prefer to retire to.

Gene Rivers of Tallahassee, Florida, home to Florida State University and a handful of other nearby smaller colleges, is one of the truly outstanding real estate professionals in this country. Gene knows real estate and he knows the real estate business. So it’s no surprise that he is approached by 25-30 parents a year with kids going to one of the nearby universities who want to buy a rental property for their children to live in and rent a couple to some roommates. After all, Gene helped his own son buy a house that his son then lived in with roommates while going to college.

First, Gene says, the young college person has to be responsible enough to screen potential tenants or roommates, do a credit check if need be, sign agreements, collect the rent and not let the place fall apart. “Parents cannot be absentee landlords, Gene says. If your child is not the manager type that’s fine.” You just need to know that going into arrangement to avoid stress for your studying student and yourself. Know who the landlord is and what the responsibilities are.

 

Landlord Articles

Property Managers take notice: “Data breach prevention Is dead”

Property Managers should read this important notice from ‘The Hill’. It is a reasoned explanation of why your data on the cloud may not be safe – regardless of  precautions and promises from vendors.

It’s time that executives and information security professionals accept the fact that their companies will be breached and start thinking outside the box when it comes to data security. To be in denial of this truth is to not accept reality. Indeed, based on what happened last year, 2014 […]

Landlord Articles

Top 10 Emerging Trends in the Apartment Rental Process, According to J Turner Research

Landlords, it is helpful to know the current trends among renters. Here is an interesting analysis of how today’s rental market is changing this year and beyond.

J Turner Research examines the top 10 emerging trends in the apartment rental process for 2016. Washington, D.C. —As you prep for an even more profitable 2016, J Turner Research presents the top 10 emerging trends in the apartment rental process that can empower you to increase your closing ratios. […]

Landlord Articles

Merging landlords see growing profit on rentals

Merging landlords see growing profit on rentals

Click here to  view original web page at www.cnbc.com

Merging landlords see growing profit on rentals

It was supposed to be a short-term play. Investors would buy thousands of bargain-basement single-family homes during the foreclosure crisis, rent them for a few years and then sell them off and be done.

That’s what the critics thought anyway, but that is not how this still-nascent class of real estate is playing out. Instead, the big players are consolidating, which could make the stocks of those left standing potentially more attractive.

The announcement last week of a merger between Arizona-based American Residential Properties, which owns 8,938 rental homes, and California-based American Homes 4 Rent, which owns 38,377, was the third such deal in the asset class this year. The combined company will own and manage homes in 22 states and is projected to have an equity market capitalization of $5.5 billion based on closing prices as of Dec. 2.

“In our view, this is a very positive outcome for both AMH and ARPI shareholders, with substantial upside opportunities for earnings accretion over time,” said analysts at Raymond James, which is acting as financial adviser to American Homes 4 Rent. “The sector’s recent consolidation should only improve visibility, liquidity, and valuations among the remaining large players.”

The reaction on Wall Street to the merger, however, was not so positive. AMH shares were down nearly 5 percent at the close last Thursday, the day of the announcement. Analysts called that curious. (Shares are off 5.9 percent year to date.)

Hawkes blames rough third-quarter earnings on transition pains, as the company became less of a buyer and more of a manager of the rental homes. She still believes firmly in a vast growth potential for this sector, despite the recovering housing market. The roadblock, however, has always been capital.

“The stock market expects us to accomplish in three years what it took the multifamily sector 25 years to do. The ability to raise capital to grow is the critical element for the single-family rental sector, but issuing dilutive equity or increasing leverage were not attractive options for ARPI,” Hawkes said. “Absent access to growth capital, we concluded consolidation made sense in order to enhance scale, increase operating efficiencies, share best practices and create additional value for our investors. We are rearranging the chairs in the room to optimize performance.”

Two other major players in the sector, Starwood Waypoint Residential Trust and Colony American Homes, announced a merger in September that could create a company with just shy of $8 billion in assets. Together they own about 30,000 homes.

Earlier this year, Silver Bay Realty Trust agreed to buy the entire portfolio of Atlanta-based The American home. That consisted of 2,460 rental properties in three states.

Scale has always been the buzzword in the brave new world of large scale investors in single-family rental homes. Managing thousands of individual homes is a far greater challenge than managing units in a single apartment building. Some have outsourced the management, while others built an infrastructure from scratch.

The total number of single-family rental homes increased 35 percent since 2006, with smaller investors also taking on millions of distressed properties to rent. This happened as the nation’s home ownership rate fell to the lowest level in 50 years.

Interesting property management articles and tips