Dealing With City Hall: Avoiding The Red Tape

Don’t let horror stories of red tape and difficult government employees stop you from getting the license to run your rental.

Find out about the permits your city or state requires: construction, renovation, plumbing, heating, electrical, signs or parking.

District zoning ordinances may entail permits for fences and retaining walls. Your city’s website will have the various height and corner lot restrictions.

Know the expiration dates for approved permits, the different certificates you may need, and taxes you have to pay. Be aware of your city or state’s code of ordinances, and the penalties for violating them.

You may need a separate permit for each rental unit. If you have several within one building, only one permit may be needed. This is valid for 12 months, renewable on the same date the following year.

Prepare for a visit from city inspectors to check if your units are compliant with construction or housing codes on sanitation and safety.

Always remember to fill out the necessary forms and read instructions and requirements carefully. Enclose your payment with the forms, and remit these to the offices concerned. An example of required permits can be found here.

Your Lawyer and You: Working With Your Attorney

Maintain a good working relationship with your attorney, while keeping these in mind: Is your lawyer easy to reach? If it takes forever for your lawyer to return your calls, find someone else.

Does your lawyer respect your opinions and give you the information you need? Your lawyer should be willing to talk with you about every little detail, including your rights and options.

Check all paperwork completed, and if they’ve filed the necessary legal documents. Remember to get copies of everything. Having duplicates may be useful in case you need to find a new attorney.

Your lawyer should keep you up-to-date on how long each contract or case will take. Make sure your lawyer keeps to the timeline you’ve agreed upon.

Lawyers cost a lot of money, so always scrutinize the bill. Ask for an itemized statement so you’ll know what you’re paying for.

Your lawyer can take care of all legal paperwork, customize your contracts, and maintain your legal records. Above all, a competent attorney will keep you out of trouble with sound legal advice, and taking action on your behalf when needed.

Why not listen to this advice from a seasoned real estate lawyer?

Commercial Leases

Do you have a commercial space for rent? You’ll need to know how a commercial lease differs from a residential rental.

For one, there is no ceiling on the security deposit. You may set an amount according to your profitability estimates. Also, there are no regulations protecting a tenant’s right to privacy, consequently, it is easier to evict a commercial tenant than it is for a residential one.

A commercial lease is generally for the long-term. However, since a lot of money is at stake, expect a lengthy negotiation between you and a prospective business tenant. Some businesses have particular requirements and may want to negotiate in terms of area dimensions, modifications, improvements, maintenance and repairs, subleasing and utilities.

There are no standard forms of agreement, as each lease may be customized according to your requirements. 

Here is a sample commercial lease agreement to help you get started. 

Dealing With Subcontractors

One of the advantages in getting a sub-contractor to work on your project is the overall reduction in costs.
 

Before hiring one, make sure to do your basic research. Don't forget to look at references, qualifications, skills, quality standards and accreditation. One tip: ask if a sub-contractor is licensed. If they are not licensed, you will most likely get a better price. The reputation of a good sub-contractor travels by word of mouth, so do ask around.

Have a set of questions on hand, depending on your requirements (fees, hours and availability, equipment), plus other important matters based on your particular situation (is the sub-contractor willing to work evenings and weekends? Does the sub-contractor have medical insurance?).

Before interviewing prospective sub-contractors, make sure you have all the plans of your project outlined from start to finish. Having a detailed budget is crucial, as well. It will give the sub-contractor an overall view of the scope and limitations of the project, and most importantly, you wouldn't want to run out of funds in the middle of the work, would you?

One vital thing to remember when dealing with sub-contractors is the sub-contractor agreement. It doesn't have to be a huge deal involving an attorney and detailed legalese. The sub-contractor's agreement simply outlines the expectations between you and the sub-contractor, the objectives, the scope of the project, and the method of payment.

Putting together a simple sub-contractor's agreement protects both you and the sub-contractor, and saves you the trouble of having to deal with business relationships ruined by verbal agreements gone sour.

Ideally, it would be wise to manage and supervise the sub-contractor's work, check the evidence of work done and make sure that contractual obligations are met. However, if you cannot be on-site the whole time, make sure that part of the sub-contractor's agreement states that the job site be kept clean and safe from hazards the whole time. This is to protect yourself if you are using unlicensed sub-contractors, as you are assuming liability for them while they are working on your project.

If you plan on using sub-contractors on a regular basis, consider setting up a database of contractors and sub-contractors that you know and trust.

Do You Have People Skills?

Do you have people skills?

One way to determine if you're able to completely manage your property yourself is to analyze your own personality and experience.

To manage your rental property, you will need marketing and accounting skills, a professional attitude, time management, and most importantly, people skills. Are you a people person? Do you enjoy working with people and embracing new ideas to solve problems? Are you patient and tolerant, as well as responsible and confident?

A successful landlord is one who can be fair, firm and friendly. Managing your own property is a labor of love and having maintenance and repair skills will benefit landlords who enjoy working with their hands.

Having a natural affinity for people will eventually carry over into an exceptional sales ability, enabling you to be a better negotiator and deal-maker. Most importantly, keeping a positive and accommodating attitude will help you learn and develop your property management skills effectively.

Read this article for more tips to develop your people skills.

Generating Interest in Your Rental

Owning a rental is a challenging business. You need every advantage you can get to promote your property. 

First off, make sure you've completed the necessary repairs and renovations to make your property as attractive as possible. First impressions go a long way in improving your chances of a “full house”.

Place a “For Rent” sign to attract drive-by applicants. You can also run an ad in your local newspaper. 

Take advantage of free advertising through community bulletin boards. Post colorful flyers in local shops, businesses, churches and community centers.

Never underestimate word-of-mouth advertising. Inform family, friends and business associates. It's always a good idea to consider holding an open house to showcase your property to prospective tenants.

Adding popular amenities can also draw attention to your property, like high-speed Internet access, discount tickets to local events, or a complimentary welcome basket. Imagination is the key!

Expose your rental property to the widest range of searchers, and ensure it is professionally marketed by listing it on rental vacancy sites online.

Try this on for size:

Property Maintenance

If you are a landlord, you'll discover that there is always work to be done.

It is important to know your property well. Have a budget for maintenance, and fix problems promptly to avoid major expensive repairs in the future. You would also want insure your property against damage that may occur, either through accident or otherwise.

Install fire prevention equipment like fire alarms and extinguishers. Ensure electrical safety by hiring a qualified electrician to inspect and maintain your electrical system. And don't forget those termite inspections!

Keeping your facilities well-maintained and orderly will make a better impression on prospective tenants and reduce the risks of falls or fires. Check all heating, air-conditioning and ventilation systems regularly, as well.

If you have continual repair problems, consider hiring a full- or part-time maintenance worker. Your best bet is to hire one based on experience, skill level, response time, good references and reasonable rates. You can compile a logbook of all maintenance work done on your property for your records.

Encourage tenants to immediately report any defects, safety or security problems. Give your tenants at least 24 hours' written notice of an inspection or repair.

This article contains some useful tips that can help you maintain your property.