Brandon Turner - The Book on Managing Rental Properties: A Proven System for Finding, Screening, and Managing Tenants with Fewer Headaches and Maximum Profits

The Book on Managing Rental Properties

Copyright 2015 by BiggerPockets Inc. All Rights Reserved.

Written by Brandon Turner and Heather Turner

Published by BiggerPockets Publishing LLC, Denver, CO

This publication is protected under the U.S. Copyright Act of 1976 and all other applicable international, federal, state, and local laws, and all rights are reserved, including resale rights: you are not allowed to reproduce, transmit, or sell this book in part or in full without the written permission of the publisher.

Limit of Liability: Please note that much of this publication is based on personal experience and anecdotal evidence. Although the author and publisher have made every reasonable attempt to achieve complete accuracy of the content in this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. Your particular circumstances may not be suited to the examples illustrated in this book; in fact, they likely will not be. You should use the information in this book at your own risk.

Any trademarks, service marks, product names, and named features are assumed to be the property of their respective owners and are used only for reference. No endorsement is implied when we use one of these terms.

Finally, use your head. Nothing in this book is intended to replace common sense or legal, accounting, or professional advice and is meant only to inform.

ISBN: 978-0-9907117-5-9

First Edition

Acknowledgments

Thousands of hours go into the creation of any book, and only some of those hours were our own. Therefore, we want to take a moment to thank the many individuals who helped put this book into its final form.

Thank you to Allison Leung, for your many hours spent editing our rough text.

For Mindy Jensen, for your diligent research into numerous aspects of this book, including the 50 state-specific rules/laws at the end. Oophta.

For the BiggerPockets Book Launch Team who helped read this book before the launch and helped us hone in our message!

To Josh Dorkin, CEO of BiggerPockets, for your leadership in this book writing and publishing adventure and for taking a risk on us.

To the leaders in the BiggerPockets community who helped record interviews in preparation for this books launch.

And finally, thank you to the BiggerPockets community, from whos shoulders we have long stood upon. Without your stories, lessons, guidance, and advice we would not be where we are today.

And to anyone and everyone we missed...

Thank you.

Dedication

This book is dedicated to our parents, Rick & Lori and Shane & Rachel. Not only did you raise us to be financially wise, you also raised us to know that there are things far more important that money in this world. Thank you.

Table of Contents

CHAPTER 1 - SO YOU WANT TO BE A LANDLORD?

About the Authors

What This Book Will Teach You

What This Book Wont Cover

What is BiggerPockets?

What is Landlording?

Landlording Tasks

Should You Manage Yourself or Hire a Professional Management Company?

Surprise: Everything Wont Always Apply

CHAPTER 2 - THE EIGHT BUSINESS ATTRIBUTES OF A SUCCESSFUL LANDLORD

A Tale of Two Landlords

Wrapping it Up

CHAPTER 3 - INITIAL STEPS

7 Things to Do Before Signing Your First Lease

Inherited Tenants

What Condition Should Your Property Be in?

How Much Can You Rent Your Property for?

The Security Deposit

Wrapping it Up

CHAPTER 4 - FAIR HOUSING

What is Fair Housing?

Dealing with Disabilities and Fair Housing

Examples of Fair Housing Discrimination

6 Tips for Staying Compliant with Fair Housing Laws

Penalties for Violating Fair Housing

Wrapping it Up

CHAPTER 5 - ADVERTISING YOUR VACANCY

Defining Your Ideal Tenant

What Makes Your Property Desirable?

Where to Advertise

Tracking Your Advertising Results

Taking Quality Photos

Wrapping it Up

CHAPTER 6 - TENANT PRE-SCREENING

What Makes a Great Tenant?

What is Tenant Screening?

Pre-Screening Potential Tenants

Setting Your Minimum Qualification Standards

Section 8

Showing the Property

11 Most Common Questions Asked By Tenants Answered

7 Tenants Well Never Rent to

Wrapping it Up

CHAPTER 7 - THE APPLICATION PROCESS & TENANT SCREENING

The Application Form

The Application

The Application Fee/Identification

Digital Applications

How to Process the Application

Advanced (& Sneaky) Ideas for Tenant Screening

Denying an Applicant After Screening

Should You Allow a Cosigner?

Accepting a Tenant

Next Steps After Approving a New Tenant

Wrapping it Up

CHAPTER 8 - SIGNING THE RENTAL CONTRACT

Month-to-Month or Term Leases?

Where to Find a Good Rental Lease

Why the RIGHT Lease Matters

22 Things Every Lease Should Contain

How to Sign the Lease Agreement

New Tenant Orientation

The Tenant File

Wrapping it Up

CHAPTER 9 - MANAGING TENANTS

Setting Office Hours

How to Collect Rent

Grace Periods and Rent Extensions

Raising the Rent

Periodic Inspections

Communicating With Tenants

Hiring a Resident Manager

6 Ways to Keep Yourself Free From Lawsuits

Generating Extra Income and Reducing Expenses

Wrapping it Up

CHAPTER 10 - DEALING WITH PROBLEMS

What to Do When Tenants Dont Pay Rent

Handling Tenant Maintenance and Repairs

Bounced Rent Checks

Abandonment

What to Do When a Tenant Dies

Dealing With Drugs

Lease Compliance: The 10 Most Common Problems Youll Encounter

Wrapping it Up

CHAPTER 11 - GETTING RID OF BAD TENANTS

Why Tenants Need to Be Removed

Not Renewing the Lease

Cash for Keys

Evicting a Tenant

Wrapping it Up

CHAPTER 12 - DEALING WITH CONTRACTORS

The General Contractor

The Handyman

Specialists

Licensed vs. Unlicensed Contractors

5 Ways to Find Great Contractors

Screening Contractors in 5 Steps

8 Tips for Managing Contractors and Handymen

Wrapping it Up

CHAPTER 13 - WHAT TO DO WHEN YOUR TENANT MOVES OUT

Notice to Vacate

Preparing for Your Vacancy

The Move-Out Packet

The Move-Out Inspection

Turning Over the Unit

The Disposition of Deposit

Wrapping it Up

CHAPTER 14 - BUSINESS ORGANIZATION AND BOOKKEEPING

The 3 Benefits of an Organized Landlording Business

12 Things Your Office Should Have

Bookkeeping Basics

Wrapping it Up

CHAPTER 15 - THIRTEEN PRINCIPLES FOR BEING AN INCREDIBLE LANDLORD

Final Words of Wisdom

Wrapping it Up

APPENDIX

Landlord/Tenant Resources for the 50 States

CHAPTER 1 - SO YOU WANT TO BE A LANDLORD?

This book was written for anyone who wants to make more money, work less, and have fun doing it.

For anyone who wants to build wealth while still maintaining a life.

For anyone who wants to travel more, freak out less, spend more time with family, for anyone who wants to maintain stability while rocketing their net worth into the stratosphere.

Thats right, effective landlording can accomplish all these goals and can do so in powerful ways. You might be a first-time landlord, just struggling to get started with your first rental house. Or perhaps you are an experienced property owner, looking to find better ways to maximize your time so you can spend quality hours with your family and friends. Or maybe you are a property manager, looking after other peoples properties for a fee and trying to improve your skills. Whatever your background is, if you want to improve your landlording skills, this book is for you.