ASK Annette and Leslie with LVRG - A STEP-BY-STEP GUIDE TO RENTING OUT YOUR HOME

A STEP-BY-STEP GUIDE TO RENTING OUT YOUR HOME

A STEP-BY-STEP GUIDE T TEP GUIDE TO RENTING OUT YOUR HOME OUR HOME

ASK Annette and Leslie e and Leslie with LVRG

Table Of Contents

To Rent or Not to Rent?

You Control the Risk

Good Tenants = Rental Bliss

Weed Out Bad Apples

Red Flags

Get it in Writing

Regular Inspections

Laying Down the Law

Protect Against Damage

10. Fair Housing Act

11. Renting 101

12. How to Get Your Property Rented

13. Ongoing Property Management

14. How to Handle the Move

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About Annette and Leslie e and Leslie Annette and Leslie are both experienced real estate professionals based in Las Vegas, Nevada, with unique backgrounds and specializations that contribute to their success in the industry. Annette, originally from New Mexico, has been in Las Vegas since 1992, with a brief period in Southern California from 1996-2003. Her educational background includes a Bachelor of Science in Technical Management with a focus on Criminal Justice. As a certified Military Relocation Specialist, New Home Professional, and Buyer/Seller Certified agent, Annette has a deep understanding of the challenges associated with relocation, both in and out of state. Her expertise extends to both active and retired military moves, as well as non-military moves. Annette is known for her strong marketing skills and ability to sell homes quickly, utilizing her network of agents effectively. Leslie Reese, on the other hand, has lived in Las Vegas since 2003 and has been a licensed Realtor for over eighteen years, with experience in both Oregon and Nevada. She is the Founder and Broker/Owner of Las Vegas Realty Group, a full-service brokerage comprised of highly professional and experienced agents. Both Annette and Leslie share a commitment to exceptional client service and high ethical standards. They pride themselves on in-depth knowledge of the area and approaches each transaction as if it were their own, ensuring a less stressful buying and selling experience. Leslie has earned a reputation for outstanding client service and excellence in business, was recently voted as a Top Realtor in Vegas, with 95% of her business coming from referrals.

While Annette holds multiple certifications, including being a certified Listing and Buyers Professional, Leslie, as a Certified Expert Listing Agent specializes in handling high-end luxury homes and ranging to more modest properties. She also oversees the Property Management division of the brokerage, as well. So, she not only helps buyers and sellers, but also manages properties for investors. Outside of their professional lives, both realtors enjoy active lifestyles. Annette spends time with her fiancé, family, 4-legged children, and has a passion for crafting, adventures, and cooking. She also actively supports animal welfare causes. Leslie enjoys outdoor activities with her family and dogs at Lake Mead, including boating and jet skiing, hiking at Red Rock Canyon, and riding at the sand dunes. In summary, both Annette and Leslie are dedicated real estate professionals in Las Vegas, each bringing unique strengths and specializations to their work while maintaining a strong focus on client satisfaction and ethical business practices.

Accomplishments Selecting an agent with diverse expertise and certifications offers numerous advantages in navigating complex real estate situations. Here's why partnering with our team gives you a distinct edge:

Annette's Certifications: CREN (Certified Real Estate Negotiator) CSI (Certified Sales Interrogator) CLP (Certified Listing Professional) CREM (Certified Real Estate Marketer) MRP (Military Relocation Professional) VA (Veterans Certified) CNHP (Certified New Home Professional) CEBA (Certified Expert Buyers Agent) Leslie's Certifications: CELA (Certified Expert Listing Agent) ePro (Advanced Digital Marketing Techniques) ABR (Accredited Buyer's Representative) Property Management Certification

Negotiation Expertise As a Certified Real Estate Negotiator, this duo brings specialized training in negotiation strategies to the table. This expertise allows them to effectively advocate for both buyers and sellers, ensuring optimal outcomes in every transaction. Their skills in managing various personalities and competing interests leads to higher client satisfaction and increased referrals. Listing and Marketing Proficiency Both Annette and Leslie are Certified Listing Professionals, offering significant advantages for property sellers. Their expertise in listing and marketing homes ensures properties are

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presented in the best possible light to attract potential buyers. With advanced skills in pricing strategies, negotiation tactics, and market analysis, they can facilitate quicker sales and potentially higher selling prices. Digital Marketing Edge Leslie's ePro certification and Annette's CREM (Certified Real Estate Marketer) designation provide a significant advantage in property marketing. They create targeted campaigns that effectively attract potential buyers using the latest marketing tools and platforms. This expertise ensures optimal property presentation across various channels, potentially leading to quicker sales and higher selling prices. Comprehensive Buyer and Seller Representation With certifications like CEBA (Certified Expert Buyers Agent), CELA (Certified Expert Listing Agent), and ABR (Accredited Buyer's Representative), our team is well-equipped to handle both sides of real estate transactions with expertise and professionalism. Specialized Services Annette's MRP and VA certifications demonstrate expertise in assisting military personnel and veterans with their unique real estate needs. Additionally, her CNHP certification showcases specialized knowledge in new home transactions. By choosing our team, you're partnering with knowledgeable and skilled advocates committed to achieving optimal results in your real estate transactions. Our diverse certifications not only enhance our credibility and trustworthiness but also signify our commitment to maintaining high industry standards and staying updated with the latest trends.

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Why Choose Annette and Leslie? e and Leslie? With years of experience in the dynamic Las Vegas real estate market, both Annette and Leslie have honed their skills to provide exceptional service tailored to your unique needs. They believe that strong relationships are the foundation of success in real estate. By truly listening to your needs and communicating effectively, they have built a reputation for creating lasting connections with their clients. This approach has resulted in a high rate of repeat business and referrals. Being truthful with her clients, even when it's not what they want to hear, builds trust and credibility in the long run. They prioritize honesty because it builds trust and credibility. This ethical approach not only aligns with their values but also ensures you make informed decisions throughout the process. The real estate industry is ever-changing, and they stay ahead of the curve by continuously updating their knowledge. From the latest market trends to cutting-edge technologies and best practices, they bring current, relevant expertise to every transaction. This adaptability allows them to navigate unpredictable market conditions effectively, ensuring their interests are always protected. Your satisfaction is their top priority. They are committed to putting your needs first, even if it means sacrificing short-term gains. This dedication to your success has built them a strong reputation and led to long-term success through referrals and repeat business. With deep knowledge of the Las Vegas real estate landscape, They offer invaluable insights into neighborhoods, schools, and local market conditions. This expertise allows them to guide you to the best opportunities whether you're buying or selling.

They respect your time and work efficiently to streamline the buying or selling process. Their organizational skills ensure nothing falls through the cracks, allowing you to focus on the excitement of your real estate journey. By choosing either of them as your real estate agent, you're not just getting a professional to handle a transaction – you're gaining a dedicated partner committed to your long-term real estate success.

Testimonials & Reviews for Annette and Leslie e and Leslie

Here’s a list of just a few people whom Annette and Leslie have helped buy or sell a home, and what they said about working with them: “What more can you ask for in an agent who is patience, compassionate, understanding, responsive, personable, have your best interest, and to top it off, a bubbly-energetic personality that is contagious. This is Annette and she is awesome! I was referred to Annette and I am fortunate to have her as my agent. Buying a house is a big financial decision, especially we're not familiar with the area. She was very instrumental and informative throughout the process - discussions on locations, loans, inspections, insurance, etc...Without her experience and guidance, we wouldn't have purchased and closed escrow. She truly has the clients best interest (top priority). I couldn't stress how important this was for me, based on my past experiences with out agents. I was not able to attend a few in-person meetings/inspections, but guess what, Annette was there in person as well as through FaceTime. Her communication and availability is exceptional and I wouldn't feel confident if it wasn't for her. She keeps me informed and her demeanor keeps you at ease to ensure your needs and comfort level are met. I couldn't be more happy and satisfied with the end result. Any agent or buyer could end their real estate experience/relationship after escrow, but not for me. Til today, we still keep in touch, and occasionally I will drop a text. She's that personable and easy to get along with. Highly recommend Annette if you need an agent who will go the extra mile. Thanks for all your effort and time throughout this journey. Wouldn't feel as confident without your experience and guidance!!! Looking forward to our next meeting." - Sam Le

“What made me decide to choses Leslie Reese as my Realtor was simple, she genuinely cares and wanted to help me. Even though I work in the real estate industry, I quickly learned there was a lot to the home buying process that I wasn’t aware of. Luckily Leslie was there to literally and mentally hold my hand through it all. I really cannot stress enough how genuine she is about helping her clients. In this market, buyers just expect to pay thousands over asking and/or makes tons of concessions. I nearly settled for a “not so ideal” home (to put it nicely) because that was my mindset as well…I thought I just have to settle for whatever I can get in to and remodel after. But Leslie knew that home wasn’t what I really wanted! She found me another home ASAP in the same community, that was move in ready, in my price range, and had all the features that she knew I’d love. With Leslie’s expertise and guidance, my offer was accepted, without having to go into a bidding war with the other buyers, and I could not be more grateful that Leslie took the extra step to get me into a home that I LOVE versus letting me close on a home I thought I had to settle for. I would highly recommend Leslie Reese to anyone who is looking to buy/sell and have already told my friends all about her!” - Thuy Quach-Nguyen “You can’t get a better realtor than Annette! I completely recommend!! Quick to respond, very personable, listens to your needs! When we first contacted her, we gave her the timeline of when we needed to move. She contacted us right away when that timeframe came up and got our lists of our wants and needs. She informed us about the current market and we talked about our price range. She never showed us a place that was over our budget! No matter what time of day, she always responded quickly to my questions. If she didn’t know an answer, she immediately found it for us! She made the process so easy and fun for us! I cannot thank her enough for helping us find our new home! " - Taylor Guinn

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“I moved to Vegas January of 2018 I had no clue of any Realtors here so I Googled Realtors of Las Vegas and up popped Las Vegas Realty Group, I went ahead and took my chances. As a widowed man they made my home buying needs so easy putting up with me of no I don't like this no I don't like that. Their knowledge of the Vegas communities and negotiating skills are totally unquestionable, there were response time back to me was no more than a 15 minute wait. I was working directly with Leslie and she would not allow at me to pay more than the house then it was worth, her honesty is so much appreciated. I wish they had more than a 5-star rating because I would give Las Vegas Realty Group a 10-star. My chances that I took with Las Vegas Realty Group paid off and when it comes to selling I know there's only one phone call I'm going to make.” - Stephen Hudson “My husband and I feel so lucky we found Annette! She is a down to earth person who actually listens to her clients wants and needs and does everything in her power to find them. Even when we kept changing our criteria on her, she responded quickly and always had a smile and no worries attitude. She answered all our questions quickly whether it was in person or via phone/text and was with us throughout the whole process of looking for a home, finding a home and purchasing our wonderful forever home. We also had some requests we wanted to make to the seller and Annette went to bat for us and was able to get everything (within reason of course) we wanted and then some. I would definitely recommend Annette to anyone looking to buy or sell a home. She's the best!! Thank you Annette! " - Rodney and Holly

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"Leslie has helped me purchase 3 different properties. She is always responsive to any inquires. Since I live out of town, she never hesitated to be my eyes and ears when thinking about purchasing a property. I am very glad I found Leslie!” -Rita Carstenshall Annette deserves 10 stars not just 5! She is a standout in every respect! Nobody we have ever met is as responsive or committed to serving us as she was. On one occasion we called her on short notice to view a property. Within 30 minutes we were on our way to visit not just one but two properties. She also learned our likes and dislikes very quickly which enabled her to find properties that were contenders. And throughout the sales transaction process, she was extremely thorough and remained our strongest advocate. We cannot say enough good about Annette's personal commitment - the results speak for themselves - we could not be happier with our new home! " - Joe and Kathy Schroedel "Leslie helped see us through an incredibly smooth and efficient process for buying our new home! She was always urgent and available to keep the process moving along, and it was clear from the start that our best interests were always her main concern. Whenever we had questions or concerns, Leslie was available to assist us. I firmly believe we wouldn’t have successfully gotten through the home buying process without her!" -Alec Albnathy “Annette is an amazing realtor. We originally had a different realtor and while they did their job it felt more like they were just doing their job. We'd find a house, put in an offer, not get picked, and then moved on. After months of repeating that, one of our relatives recommended we talk to Annette. From the beginning her optimism and energy was night and day with what we were used. Annette immediately reached out to our lender to come

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up with a game plan for us. By the time we got to Annette we were pretty desperate to find a house. Here's how I knew she was different. On one of our bids, we got some interest but the seller was asking for quite a few things. She could have told us to accept the asks knowing how desperate we were but she recommended we decline and keep looking. She could have made an easy commission from us but knew it wasn't in our best interest. The house we actually got; we didn't even want to put a bid in but Annette said ""you won't know unless you put in an offer."" In the end it was us and two investors and with all the work that Annette put in for us, the sellers ended up picking us. She's a wizard! Even after we closed, she’s been here to help us with not just our property but on a personal level as well. We've even exchanged messages as late as 11pm just chatting about properties and joking around. Her contact will forever be in my phone. If anyone ever asks for a recommendation or if I decide to sell/buy again, she'll be the first person I reach out to. My family and I can't thank her enough for coming through when we were in a tough spot." - Hoai Ly "Leslie was an invaluable asset in our Las Vegas home search. Her extensive knowledge of the city's neighborhoods and market trends proved to be incredibly helpful. She went above and beyond to connect us with the right resources, ensuring a smooth and efficient closing process. We highly recommend Leslie for anyone looking to buy or sell property in Las Vegas." -Rich Raito “Annette was awesome! As first time homebuyers she paid attention to all our wants and needs for our new home. We never felt like she was trying to push us towards something that was over our budget or not suited for us just to make a sale. She took her time with us and went to MULTIPLE houses trying to find our “perfect” match. She is a wealth of knowledge and you feel like you’re working with a friend from day one. I would highly

recommend Annette for all your real estate needs. - The Behnings " - Victoria and Blake Behning "We hired Leslie to sell our Las Vegas home. I have worked with Leslie for many years and so I know her talents and what she's capable of. I challenged her on this one and she came through with flying colors. She convinced me to list my home much higher than I thought it was worth and she had us in contract in under 2 weeks. Everything went smooth and my wife and I couldn't be happier with how well she handled the entire transaction from beginning to end. Thank you Leslie for a job well done!" -Matthew Garnes Adams “Annette was awesome, She’s made selling our old house and buying our new house an enjoyable experience. Annette always made us smile. She always answered all our questions and concerns and was a true professional." - Artie Fairless

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CHAPTER 1 To Rent or Not to Rent?

You’re ready to move on from your home to another. Maybe you want to switch neighborhoods, maybe you’ve found the house of your dreams, maybe you’re relocating to another city. Many people just default to selling their home in these types of situations, but have you ever considered renting out your property instead of selling it? Perhaps you know of someone who’s done just that, with great success; however, perhaps you’ve heard of someone left in an unpleasant situation with bad tenants who’ve disappeared with unpaid rent, or damaged the property. Is renting out your property even a good idea? Why go this route instead of just hiring a real estate agent, putting your house on the market, and selling it as quickly as possible? Brandon Turner, real estate investor and author, writes on Forbes.com, “Owning two homes can actually work and be profitable if you decide to rent out the previous home. By keeping the house, you can begin building serious wealth through cashflow and equity.” But determining whether renting out your home, rather than selling it, is a good idea, is a personal decision that will take some time. In the meantime, here are five main reasons for you to consider renting out your property:

REASON #1: MARKET WORTH

One of the biggest reasons to consider renting out your property instead of selling it involves market worth. How is the market currently doing in your location? Is it improving in your favor? 2

If that’s not the case, it might be worth your time (and money) to wait to list your home until things improve, rather than selling for the current value and selling yourself short (and losing out on thousands). This way, you can wait until the market has appreciated, sell it at a higher price down the road, and rent out your property in the meantime. If you’re not sure of the current market worth in your location, you can always do some research, ask someone “in the know,” or hire a professional who specializes in this area. Further, you don’t have to worry about your mortgage payments and other bills while you wait for the perfect time to sell—your tenants will take care of those payments for you, whether you rent out your home for a year, two years, three years, or more—whenever the market improves enough to the point where selling will be worth your while. This leads to another big reason that homeowners rent out their properties before selling them: long-term investment potential.

REASON #2: LONG-TERM INVESTMENT POTENTI TENTIAL

The long-term investment potential of renting out vs. putting the home on the market right away is a big draw for many homeowners who are on the fence. But the basic principle is simple: Charge your tenants more than your monthly mortgage payment and utilities, etc., and bingo!, you’ve got a profit with that additional income. You can make money from your old home, while living in and paying for another home. Think of it in terms of an almost-free investment that someone else is paying for: not only are they paying more than your monthly mortgage, but they are also ultimately paying down your overall mortgage balance. Then, as your house improves in

value over time, you can charge more for rent; this way, instead of just having someone cover your monthly mortgage bills and paying off your mortgage, you can make a profit—every single month—on what someone pays for living in your old home vs what you were paying for the mortgage.

The long-term investment potential is real, and exciting!

REASON: #3: BUILD EQUITY WHILE LIVING ELSEWHERE

Another reason you might want to consider renting your house is having someone else pay to live there while you live in another house. This might sound similar to reason #2, but the difference is that you are actively choosing to rent out your home—not because you have to move and the only alternative is selling, but rather because you can turn your primary residence into an investment property, and then purchase a second primary residence, whether it’s in your same neighborhood, the same city, or in entirely different location, and begin to build equity.

You’ll be building an investment portfolio off your own house.

REASON #4: ALTERNATIVE TO HOME LANGUISHING ON THE MARKE N THE MARKET

Renting out your home is a great option if your property has been languishing on the market and you’ve been unsuccessful in selling it, or even if you are unable to sell it for enough money to pay off your mortgage balance. Perhaps you first purchased your home when it was worth more than it’s worth today, and you can’t seem to sell it without needing to write out a check. If this is the case, sometimes the better alternative is to rent out your house so you don’t lose money while you wait for the market to improve to relist your home. You

can get your monthly mortgage payment covered, and maybe make extra money each month, as you wait for the market to appreciate, recover, and sell your home down the road at a better, more profitable time.

REASON #5: TEMPORARILY OUT OF TOWN

Finally, consider renting out your property if you don’t need to, or want to, sell your home but you’ll be away temporarily. Are you heading out of town to spend time with or care for family for an extended period of time? Do you have a temporary-only job transfer? Are you going on an extended work vacation? And are you planning to return and settle back into your home without the hassle of house hunting? This is a fantastic reason to rent out your home while you’re away. You can rest easy, knowing someone else is covering the mortgage payment and taking care of the house for you, or at least covering the costs of taking care of your house, and then your home will still be there waiting for you when you move back into town. Throughout this handy no-risk guide to renting out your property, we’ll be discussing more about these reasons for renting, as well as other issues, such as dealing with tenants, the actual renting process, and ABC management. Despite the myriad benefits of renting out your property rather than selling it—or even before selling it down the road—many people interested in the idea become stressed or overwhelmed at the prospect, because of all the unknowns, the potential risks, and more. But renting out your property isn’t as scary as you might think.

CHAPTER 2 You Control the Risk ol the Risk

I’ve given you some of the top reasons that renting out your property can be beneficial to you. Yet many people are still resistant to the idea because of the stress and potential risk. I have some good news for you. This section of the book will address two main reasons you don’t need to worry. The first? You can rent out your house with minimal risk. How? You control the risk! Let me explain. There are things you can do and steps you can take to minimize the potential risk to you. This doesn’t mean you eliminate the risk; that’s nearly impossible. But there are steps you can take to dramatically and drastically reduce possible risks associated with renting out your home to others. You’ve probably heard “horror stories” of renting situations gone bad. Stories of terrible tenants, the ones homeowners and landlords absolutely dread and fear. The deadbeat who moved in and didn’t pay rent for six months or even longer and wouldn’t leave, even with legal action. The tenant who held party after party, long hours into the night, upsetting the neighbors and disrupting the entire neighborhood, even involving the police. The tenant who not only failed to take care of the home, but also lost their damage deposit and even completely destroyed the property, leaving the homeowner with thousands of dollars in repairs. Are these among your fears? They don’t have to come true if you do your due diligence. The reality is that for most of these horror stories (and they do happen), the person renting out the home 6

didn’t know how to reduce the risks. There were no background checks and no references; no policies, procedures, protocols, checklists, or terms and conditions put in place; and no basic strategy to reduce these risks. The property was often rented out to whoever showed interest first and was essentially ready to move in. This is a huge mistake many people make when deciding to rent out their homes. Sometimes, homeowners are so excited about the idea of making money while renting out their property that they neglect the process of actually finding the right tenant and going through the proper legal procedures to protect their investment. Sometimes, people are in a hurry to leave and need to rent out right away, so they seem desperate and let the first available person move in, no questions asked. Big mistake! You want to reduce risk, not increase it. Remember the title of this chapter: You control the risk. That’s the good news—you can avoid being a player in your own renting disaster. Here are some of the mistakes people (or you) could make that can lead to such horror stories:

NOT KNOWING HOW TO ATTRACT A GOOD TENANT

One of the first issues homeowners face after deciding to rent out their homes is attracting a good-quality tenant for their home. Why? Is it luck? No—there’s a process. You have to learn HOW to attract a good tenant. Yes, this involves work. It takes time, energy, and effort. But it’s worth it to you to avoid the potential risks, disasters, and horror stories to put in the work required in this area. For example, you’ll have to do some research, learn a little about marketing, and use whatever resources available to you. If you don’t put in the time, if you don’t learn and put to use some

marketing skills, and if you don’t have (and use) the right resources to find a good tenant for your house, that’s one of the biggest mistakes you can make when renting out your home. Many people mistakenly think they can just throw a sign in the yard and somehow, a magically perfect tenant will just show up. Here’s the real deal: It takes time, effort, energy, marketing, and proper screening to find a great tenant for your house. Some people do “luck out,” and some people know a friend of a friend, but in most cases, you won’t find that great tenant without that effort.

NOT SCREENING TENANTS PROPERLY

Another common mistake people make when renting out their home is not screening potential tenants properly. Some get lucky, but many others end up with a “bad apple” occupying their home for much longer than they’d like. Later on in this book, I’ll discuss this critical issue of properly and thoroughly screening all potential tenants, but for now, let me emphasize that this is probably the most important thing you can do in the renting-out process. Screen your tenant prospects! It can’t be said enough. Do everything you can to keep those “bad apples” out of your precious home. If you don’t, and you end up with “that” tenant, you have no one to blame but yourself. It’s your responsibility to find a decent tenant for your home. Far too many people avoid this step and end up in awful situations that you wouldn’t wish on your worst enemy.

NOT HAVING A GOOD LEASE

Another area where people often make mistakes is not having a good lease in place. Just any lease isn’t enough; you need a rock- solid lease! The lease needs to work for the specific intricacies of your area, and for the laws of where you live. Lease laws

change depending on where you live. And this doesn’t just mean state to state or even city to city; the legalities of some landlord- tenant relationships can vary within a city or neighborhood. So please ensure you have in place a great lease that is specifically tailored to your location—the local area, the exact city or town, the precise neighborhood, etc., so that all your bases are covered. Later on, we'll talk more about the all-important lease.

NOT CHECKING ON THE PROPERTY REGUL Y REGULARLY

Many homeowners who rent out their property run into trouble when they don’t bother, or forget, to check in on the house on a regular basis. They assume that by screening and choosing a great tenant, that the tenant is just automatically going to take care of the home. Big mistake! Maybe the tenant could be trashing the place, either through neglect or damage (or both), and the owner has no idea because they didn’t check up on the house for a year. Then, when they finally do—let’s say the owner is moving back, the tenant is moving out, or the tenant is evicted—the home and property are so damaged that expensive repairs are in order. So, how to avoid this potential catastrophe? You need to check on your house a minimum of every six months during the tenant’s residency. That way, if there are any minor issues that arise, you can deal with them early on; if there are bigger issues, you can deal with them, too, and either evict the tenant due to the extensive damage they’ve caused, or ensure they pay for the damages before you allow them to continue living there. This bears repeating: Just like you simply must screen your rental candidates, so must you check up on your house regularly, and often. Don’t let more than six months go by in between inspections, during which time you need to look at the entire house and property to ensure they’re in the same condition and being taken care of. Go through every single room, carefully.

You can stop a problem in its tracks through your vigilance and regular, frequent inspections.

NOT KNOWING HOW TO EVICT SOMEONE

It seems simple: You’ve got a bad tenant for whatever reason (not paying rent in full, not paying rent on time, not paying rent at all, noise disturbances, theft, vandalism, bringing in pets that aren’t allowed, operating a business illegally, selling illegal substances, property destruction, etc.). Just evict them, right? Problem is, most people don’t know how to evict someone. It’s not as simple as just making a call or kicking them out. So, in the case of a non-paying tenant, when the tenant stops paying, the owner just “leaves it alone” for a month or two (or three) because they don’t know what to do, and they’re busy with their job, their family, and other life obligations. Because they don’t know how to evict a tenant, they don’t have the time toevict the tenant because they don’t have the time to learn how. As a result, the tenant stays in the house for much longer than they should. You need to know the law, the regulations, the processes, the procedures, etc., and how to deal with all the paperwork involved. Without this knowledge, and the ability to execute it, you could end up in a sticky situation.

NOT BEING WILLING TO EVICT SOMEONE

Knowing how to evict a tenant who isn’t paying rent or is causing damage isn’t enough; you have to actually be willing to go through with the eviction process. This might not sound like a big deal, but you might be surprised at how many homeowners aren’t willing to evict someone who isn’t paying them or is otherwise not the ideal occupant. It can be

a very emotionally draining and unpleasant experience to evict a tenant, especially if the homeowner is someone who prefers to avoid confrontation, and/or if the tenant is especially difficult to deal with. But there’s the thing: You’ve got to do what you’ve got to do! Even if things are emotional, uncomfortable, or worse, you need to force yourself to push through any discomfort and pain and make that decision you need to make. If a tenant is always late with payments, or is paying you in incomplete amounts, or is refusing to (or, sadly, unable to) pay you at all, then they’ve got to go. Look at this way: Technically, they’re stealing money from you by not paying according to the terms of the lease. If you let someone live in your house for free without paying you and you don’t file for eviction, then you might as well give someone access to your bank account and let them have at it. That might seem a bit harsh, and I’ll be the first to admit that it’s often challenging to evict people who need to go, but in this business, you have to be prepared to make tough decisions and then follow through when the time comes. Evicting people who don’t deserve to live in your home is just one example of a tough decision you might have to make when renting out your property. If you just can’t handle confrontation and dealing with potentially tough and difficult emotional challenges, then maybe serving as a landlord is just not cut out for you. This doesn’t mean you can’t rent out your home and reap the many benefits that come with that, if you do it right; it just means you should consider having a professional property manager manage your home for you. I can say this confidently because, as a professional property manager myself, I know that if I don’t make those tough

decisions, if I don’t file for eviction on someone who’s stealing money from my landlords, I’m going to get myself fired. And so, technically they’re stealing money from me, from my family. So, that’s why you need to be willing to evict somebody, even when it’s a tough and emotional decision. Be willing to make the tough decisions (screening candidates, doing proper inspections, evicting, if necessary) when the situation calls for it, and you’re on your way to becoming a successful landlord, reaping all the benefits of renting out your property for income. Now that you’re aware of the most common mistakes homeowners make when renting out their home, and how to avoid them, let’s move on to discussing the benefits of having good tenants, and why this will make or break your decision to rent out your property.

CHAPTER 3 Good Tenants = Rental Bliss ental Bliss

You’ve likely heard of “horror stories” of homeowners dealing with bad tenants, whether from friends, family, your Realtor®, or even in the news. This is one of the biggest reasons people shy away from renting out their property—the risk and fear of ending up with bad tenants (e.g., tenants who don’t pay their rent on time, in full, or at all; tenants who engage in risky behavior; or tenants who cause property damage). However, this doesn’t have to be your situation. In fact, if you ensure you have a good tenant—someone who pays their rent, takes care of your property, and respects your policies and rules—then you shouldn’t have many issues. Good tenants make all the difference in whether renting out your property ends up being a pleasant and fruitful decision. Good tenants = rental bliss! Allow me to give you an example of why this matters and why I believe it’s true. Consider the criminal justice system. Even though you hear or read in the news of all these people committing all kinds of crimes, the reality is that most of the population doesn’t end up in jail. Most people are good citizens and follow the laws that govern them—sure, plenty of people get speeding tickets, but most people don’t go around robbing banks, assaulting their neighbors, engaging in illegal activities, etc. When you bought your current home, for example, you probably didn’t think about whether your neighbor was a murderer. Of course, you need to exercise caution and take precautionary measures when the situation calls for it. However low the risk 14

may be, whether it’s renting out your property to tenants or finding a new neighborhood, bad things can happen and good people can get scammed or hurt. The same is true with tenants. As of this writing, the average credit score for an American citizen is 695. That means that the average person has a credit score that’s good enough to buy a house, good enough to buy a car, good enough to get a credit card, good enough to do just about anything that requires credit. Honestly, for the most part, tenants are good people—but not all are. You want to ensure you do end up with good tenants, and not risky ones. You want tenants who pay their rent on time, take care of your property, are easy to deal with, and won’t cause any major issues. What can you do to ensure you get the good tenants, and not the bad ones? First-class marketing is a start.

FIRST-CLASS MARKE SS MARKETING YOUR PROPERTY

Using first-class marketing for your property will bring in plenty of tenants. The better your marketing efforts, the more interested candidates you’ll attract, and the more you’ll have to pick from, allowing you to weed out the risky ones—the “bad apples”—and attracting the good tenants.

1. Post Your Home on All Websites

To give your rental property the most exposure possible, you’ll want to post ads on any and every single realty website, including the most popular ones, like Realtor.com, Zillow, and Trulia.

2. Write a Fantastic Ad

Think about it: What good is posting your ad to all these websites if your ad, well, stinks? You need to write a great advertisement

that highlights the best features of your home and property in a captivating and attention-grabbing way! How do you do this? Tell renters why they’ll love living in your home. Describe its best features and benefits, and maybe include some of the home’s history. Here are some other ideas: • a nice view • special features (large yard, fenced-in yard, a patio or deck, fully furnished basement, a home office, a nice garage, a pool, recent renovations, etc.) • special amenities in the neighborhood (great shopping options, restaurants, services, police, parks, riverfront walkways, community centers, nightlife, etc.) • is your home close to local quality schools and/or public transportation? • is the overall “feel” (ambiance, atmosphere) of your neighborhood something worth advertising? Is there a community feel? Does it feel safe? Could potential tenants picture themselves living there? If writing and marketing are not skills that come naturally to you, consider hiring a professional. It could make all the difference in helping you narrow down the candidates for your property.

Special Note: Fair Housing Act

When writing your ad and marketing your property, don’t forget to follow Fair Housing Act laws. This is extremely important, because if you don’t, it could come back to hurt you down the road. In the listing, don’t ever mention whom you’re hoping to attract—this is considered discriminatory and could get you into

legal trouble. For example, don’t advertise “this house would be great for single people.” Some people could complain, claiming you’re discriminating against couples and families, who wouldn’t feel accepted or welcomed in your home. This is definitely something you want to avoid.

Minimum Qualification Standards

The best way to avoid any issues with Fair Housing laws is to set your minimum qualification standards and follow them for every single tenant. We’ll be discussing these in greater detail in Chapter 3. One thing to mention now is that you should check with your attorney on the legality of your standards. You need to ensure you’re following the law at all times during this process regarding acceptance and refusal of tenants. If you don’t understand the process, you can easily step into a legal minefield and get yourself into a heap of trouble. I recommend reviewing all of your guidelines with an attorney before you start. Here’s an example of why this matters and why this is so important: Let’s imagine you’re renting out your house, and you have in place a strict “no pets” policy. You just found a great tenant, but then discovered they have a service dog—but for emotional support, not for any apparent disability(ies). You have no idea if the service dog is actually legitimate. When you meet the dog, you discover he’s a huge Great Dane who probably weighs up to 150 pounds. You don’t want to discount the prospective tenant’s need for a service dog, but part of you wonders if it’s a scheme—if they’re just using the “service dog” as an excuse to have their large pet move with them into your home. But you don’t know how to handle the situation. For example, are you even allowed to ask if the dog is a legit support animal? What do you do? Do you just rent the house to them and accept the risk of having the “service dog” damage your property (chewing a hole in the front door, wrecking your new sofa set, tearing up

your brand-new wood floors, etc.)? Do you refuse to rent to this individual and worry about a Fair Housing complaint? How do you handle the situation without breaking the law? If you’ve done your research and set up your minimum qualification standards before you ever marketed your property, then you’ll know how to handle the situation. You can be fully prepared to protect your interests, rights, and investment. You need to make these types of decisions before marketing your property and accepting rental applications. This will ensure everyone will be treated fairly and that you’re not breaking the law.

3. Take Appealing Pictures

In addition to posting your home on all realty websites and writing a stellar ad—while taking into account Fair Housing laws and your minimum qualification standards—you absolutely need to take high-quality, appealing photos of your property. You won’t attract enough tenants—or the right tenants—without this important marketing step. A picture says a thousand words. A great picture of your house can be worth more than a thousand words of a great description that talks about all the amazing features and benefits that your house has. In fact, even if your ad isn’t perfectly written or doesn’t contain all the important information, you can still have marketing success and attract tenants with some fantastic photos.

Here are some tips:

• Don’t use your cell phone to take the pictures (even the most high-tech cell phone won’t do your home justice); use an actual camera, and get a professional to take this

step if you’re not confident in your abilities • Make sure you have decent lighting—for example, take pictures during the day, and open up all the blinds and curtains; the natural lighting will result in much higher- quality and appealing pictures of your home • Remove background clutter that could interfere with the pictures; while decluttering in general is important before you put your home on the rental market, you don’t want some background mess to detract from a good shot of your home, so clean up and put things away (out of sight, out of mind!) • In the case of a tenant already living in your home, but their lease is up and you need to re-advertise, get some good-quality photos of the outside of your home, as well as your property in general; if you can, get permission from your current tenant to take a few pictures of the inside of your house So now you know that “good tenants = rental bliss,” and the pathway to rental bliss involves first-class marketing techniques outlined above. Good marketing will attract good tenants. But now, how do you ensure you get a good tenant and not a “bad apple?” Part 2 will focus on protecting yourself against bad tenants. In Chapter 3, we’ll talk about screening prospective tenants and your minimum qualification standards.

CHAPTER 4 Weed Out Bad Apples

Without a doubt, the most important step for a homeowner to take during the entire rental process is screening all potential candidates in order to weed out the “bad apples” and find a good- quality tenant. In most cases, good tenants lead to rental bliss. However, a bad tenant will almost always result in a bad tenant experience, leading to an overall bad rental property experience. There’s no way around it—you must screen every single tenant! You must ensure you’re comfortable renting to them before you have them move into your house, to protect yourself, reduce your risks, and avoid a potential disaster.

SET UP MINIMUM QUALIFICATION STANDARDS

The first step in the screening process involves setting up minimum qualification standards to protect yourself. You might be wondering what these are. Basically, these are the very minimum standards that you decide each and every single prospect must meet in order to qualify as a potential tenant. If an interested candidate doesn’t meet all your standards, then they aren’t able to rent your home. Plain and simple! This way, you can quickly move on to the next candidate. These standards also ensure you check through every item before approving a tenant so you don’t miss anything and accidentally let in a “bad apple.” Further, because you apply these minimum standards to all tenants, you can also avoid any accusations of discrimination, such as with the Fair Housing Act or Americans with Disabilities Act (ADA), or favoritism.

Minimum qualification standards also keep you on track so that problem tenants don’t slip through the cracks. Having in place standards, and checking each and every item with each and every potential tenant, will drastically reduce the odds that you’ll forget something important. Think about how easy it is to forget something. It’s human nature! In most cases, people get lucky and nothing significant happens. However, you can’t rely on sheer luck when you’re renting out your property. If you don’t have a checklist, it’s easy to forget even just one small thing, but that “small thing” can lead to a host of problems that could have easily been avoided. A bad tenant could cost you hassles and headaches, plus thousands of dollars in lost rent and damages, and lawsuits. Minimum qualification standards also help reduce the risk of a Fair Housing complaint, and will make things easier for you in defending yourself in case a complaint does arise. Let’s say someone does file a complaint against you, claiming that you discriminated against them by not renting your house to them because of reason X. With minimum qualification standards in place, you can confidently reply: “Actually, I didn’t rent to you because you didn’t meet my minimum qualification standards. Your allegations of discrimination have nothing to do with reason X. I didn’t rent it to you because of reason Y, and you did not qualify to rent my house. My minimum qualification standards are legal and in compliance with all Fair Housing and ADA laws.” You can prove that you chose not to rent to them, not because of their alleged reason X, but because of reason Y, which is clearly defined and stated in your minimum qualification standards. I recommend that you think about, determine, and put in place your exact minimum qualification standards before you ever place your property on the market.

SUGGESTIONS FOR MINIMUM QUALIFICATION STANDARDS

Everyone will have their own basic and more specific ideas for their minimum qualification standards when they’re thinking about how they will screen tenant candidates, but here is a list of some different standards to consider. Keep in mind that these are suggestions only. Please check with your attorney to ensure they are legal for your particular property and that you’re in compliance with any and all laws and regulations, which often vary from location to location. • The minimum deposit you’ll require. Most people charge a security deposit equal to one month’s rent. Some add a non-refundable pet deposit, and some charge larger amounts in credit-related situations (for example, if the person has had credit issues or if their credit does not meet the minimum standards). • The minimum credit rating you’ll require. What kind of credit rating are you going to require for a tenant? You want to do the check yourself, but remember that you must have their permission to check their credit. • Will you allow pets? If so, what type? What’s the maximum number? What’s the maximum size? “Pets allowed” is often a big draw for tenants looking to rent, but the truth is that pets can add a lot of stress for landlords. In fact, most landlords prefer not to rent to pets just to avoid the potential issues pets bring. If you choose to allow pets, make detailed rules, but consider increasing the security deposit or adding a non- refundable pet deposit, or even adding a monthly fee on top of the rent. Find out the standard—as well as what’s

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