Payday by Direct Deposit

Payday by Direct Deposit

Empire loves payday for our owners. It closes the month and it is ultimately a measure of our success. But what we do not love is tracking down lost checks in the mail. The once steadfast USPS is falling fast. In recent years we have seen a dramatic increase in the number of checks that are lost in the mail. However, all is not lost. Modern technology comes to the rescue, and direct deposit has proven to be fast and safe. We have had enormous success with direct deposit. It arrives quickly and dependably, and the whole process is trackable. Payment usually arrive in your bank account in one business day. If you are not getting your payment by direct deposit and are interested let us know. We can set you up quickly.

Maintenance Is Like Eating a Cow

Maintenance Is Like Eating a Cow

"If you have to eat it all at once its going to hurt"

     Regular maintenance to your rental property is so vitally important to its ultimate success. Budgets and wishes aside, the law of nature do not stop for anyone. With this in mind resign yourself to the idea of spending and/or saving money every month on your rental. Items like paint, flooring, appliances, roofing, plumbing fixtures, and such start to wear out the moment they are installed. Without a concerted effort to budget for their inevitable replacement you will be caught in downward spiral. We have all seen the property in the neighborhood. First the regular clean up and yard maintenance is deferred. Rents fall since the property does not look its best and now the owner has an even more difficult time being able to afford the maintenance and keep it rented. Since budgets are strained more maintenance is deferred, and after a time the owner has to "eat the cow all at once" in order to pull the property back up. This hurts and is often not possible. 

So how much do I budget? Well, if this is a property you have owned for some time look back at your records and work it out. If it  a new property there is several ways of figuring budget forecast. The most strategic since we all live on the monthly rent cycle is to budget monthly. Usually 10-20% of the monthly rental income. It can be more depending on the current condition of the property. Start with a high estimation until you have an accurate track record. This way you want be caught off guard with a big expense such as a new roof or heating system. Also, consider a separate bank account for the funds you are budgeting. Human nature being what it is, out of site is off limits. 

--Happy Landlording

SB 390 = Big changes in 2016

SB 390 = Big changes in 2016

The passage of SB 390 this fall is making some big changes in Oregon Landlord Tenant Law. Landlord and tenant advocacy groups are both claiming victory. However, those in the trenches managing property clearly see that there was no victory for either side, and at this point we are just trading blows. Some of the changes going into effect are:   

• The ability to pass through some municipal bills directly to tenants. There are some restrictions for this and Empire will be taking advantage of this new law.

• New standards on how tenant payments are to be applied.

• New standards for requiring all bedrooms to have a secondary emergency exit. This is not an issue for most of us. However, many older homes who were previously grandfathered in may be open to a new interpretation. We are waiting on some clarification on this issue.

• Empire has been requiring our tenants to carry a renters insurance policy for several years. Now we can require the tenants to add Empire as an interested party to the policy. This will help with Empire enforcing the issuance.   

As a rule Empire does not support the passage of any new changes to the current landlord tenant law as we have seen through the years that even the laws that benefit landlords create friction and conflict between landlords and tenants. Sadly, politicians thrive on this conflict as their source of importance is keeping the two sides in perpetual war.

Payments on the 19th?

Payments on the 19th?

We are often queried why Empire makes owner payments on or before the 19th of the month. We understand the importance of getting your money to you as quickly as we can. However, there are several factors leading to our timeline:

• Rents are due on the 1st and late on the 5th of the month.

• We serve 72hr Notices on the 8th and the vast majority of rents are paid by this time.

• Checks paid on or before the 8th can and do bounce as late as the 15th. We see this every month. Modern banking is great, but according to Melody Prutsman, a branch manger at Key Bank, procedures have been put in place in many banks that send bounced checks back through the system a second time. This takes time and thus we often receive notices of Non-Sufficient Funds as late as the 15th of the month.

• The rest is simple. It takes us a few days to get all the Receivables and Payables in order to insure as accurate a set of books as we can provide.

Hope this helps relieve some of the mystery.

Only a Rich Man Can Afford Cheap Paint

Only a Rich Man Can Afford Cheap Paint

Being a landlord is about watching your pennies and working those extra hours to take care of your property, so that someday your property can take care of you. With so many of our expenses out of our control, a seeming great deal on paint at your local hardware stores sidewalk sale is hard to resist. But you must resist. In any painting project, the labor is the most expensive portion of the job. So with time being the our most valuable commodity, do not waste a minute putting cheap paint on your rental. Good paint will apply with ease, cover in one coat, and last for years. However, cheap paint is sticky or runny, takes multiple coats to cover, and will start to fade or peel soon after. There are many brands to choose from - Rodda, Sherman Williams, Forrest (my favorite), Benjamin Moore, and many others. Try to stay away from the companies that sell the different quality grades and stick with the best. Those companies sell only one grade of paint, as they do not want to put their name on anything less. Also spend time on the prep, and if you are going to paint your pre-1978 rental home, become lead based paint certified or hire a certified contractor to test the home for you. Being busted for this infraction will take all the profits out of your project for a long time, if not forever. Remember: everyone is trying to take your money or cost you money, so a little paranoia is healthy. I see a lot of folks whip out the sprayer fifteen minutes after they arrive on the job and run around like the world is on fire. Slow down, think the job through, and set some time aside to do the job right. We want this paint to last years - not months. A quality prep job using quality caulking and paint will last for years. So work hard, save your pennies, take care of your rental, eat your vegetables and someday maybe you will afford cheap paint. Until then, continue to resist the temptation. Happy landlording!  

Bathrooms - How to Keep from Falling In Part II

Bathrooms - How to Keep from Falling In

Part II

Even with the best of inspections and meticulous maintenance, eventually every bathroom needs a partial or complete rehabilitation. Just the simple fact of our not so perfect world we live in is that nothing lasts forever. Good landlording starts with the idea that you want your investment to stand the test of time, and that is going to take some effort and smart planning on your part.

Lets begin with water. It is the reason we need the bathroom, and the reason we spend so much money keeping it running. When you begin your remodel keep your main focus ahead of function and ascetics. Keep the water where is belongs and use materials that are impervious to water. Here are a few tips and tricks to help your hard earned dollar last a bit longer.

• Bathtubs and Showers- KISS (Keep It Simple Stupid) is the idea- Tile surrounds are beautiful but very time consuming to keep them that way. You may find yourself in the position eventually where you have to replace the tub/shower unit. For my money I go for fiberglass every time; simple and cost effective. The only draw back for a rental property is going to cheap. There are several brands and an enormous array of installation options. One that is often over looked is the 3 or 4 piece options for the remodel. Next, make sure you have a good contractor. Check their work and ask questions. Do not worry about offending them. The good ones love to brag and explain their work.
• Flooring- The same theme here- Good vinyl is great, but a good tile job is better. You can spend more with tile, but it last a very long time. If you choose vinyl make sure it has at least a urethane finish and is a glue less application. That way if you need to re-install the vinyl some day you do not need to install new sub-flooring as well. Also, think of your floor and the tub. I like to run the vinyl up behind the baseboard. It's not always possible, but it can be worth the small effort. Keep the snap together flooring out of the bathroom. Some of the snap together flooring is quite impervious to the water. However, the joints are not sealed and water runs right through to the sub-floor. The main idea is to keep the water where is belongs. Stop dreaming about that perfect tenant who is going to painstakingly dry the floor after a shower.
• Toilets- The Saga Continues- Do not bye a cheap toilet. You will spend the cost of a good one several times over in stoppages over the years. The fact is the good ones will flush a big load (sorry for being a bit coarse), including the occasional diaper, and if you buy the cheap ones you will need the number of a good plumber. Then, be prepared to begin a battle with the tenant over who should pay for it. Save your self the trouble. The better ones are not much more. Ask your plumber about which brand and type he prefers.
• Sinks and Cabinetry- Again- With cabinets it is hard to not use particle board, so you are going to have to just bare it, as the money spent for quality here is usually out of proportion to the return you get. Just take your time in making sure the seams are caulked and inspect for leaks. Some left over vinyl on the base of the vanity and rolled up the sides a bit to help the water run out onto the floor is a nice touch. With sinks, they all work. Metal sinks chip and rust, and porcelain should last a bit longer. Cultured marble sink/countertop combos are very cost effective and can look fine if installed well. Talk to your contractor, and be reluctant to have the plumber install it.
• Exhaust Fan- Victory- A well thought out exhaust fan system can be a thing of beauty. The perfect system is one the tenants cannot bypass, moves a lot of air, and is quiet. Try to switch the light with the fan so they cannot take a shower with out turning on the fan, or a timer, or maybe a humidity bypass where the fan does not go off until the humidity has been exhausted. You will still need to explain to the tenants about using the system and keeping the humidity out of the bathroom. I have seen bathrooms where the walls were almost permanently wet with lots of mold growing on the walls. Prevention is the key here.

The most expensive item in your remodel is labor and time off the market, so spending a few extra dollars on materials and a little extra time can save thousands over the years. The idea is to spend this kind of money as least often as possible. Think it through and it can be fun and profitable.

Drive-by Property Management

Drive-by Property Management

    One of our motto's here at Empire (we have a lot of them) is "it is easier to keep up than to catch up". With this motto is mind we have decided early on when we just managing our own rentals that a more proactive approach to management is needed in order to succeed. In order to accomplish this you need fresh intelligence. If your wondering if we use the latest "Orwellian" spy equipment the answer is no. We just drive by the property every month take a picture, take some notes, and upload into our software. This proactive approach is the only way to run a management company. Looking at a rental property once or twice per year is mostly a rent collection company not property management. If you would like more info request our welcome packet.

Inspections

INSPECTIONS-
We are often asked how often we inspect. Good question as I am sure you want to know how well we are taking care of your property. A lot of property management companies inspect once per year, and if they really want to impress they inspect twice per year. Well this is Ok, but not a very  scientific solution as this is not a one size fits all business. Empire starts out by inspecting usually within a month of move-in, as we want to know what kind of house keepers we are dealing with. If they pass the first inspection -unpacked, floors vacuumed, no piles of rotting garbage or dirty dishes- we set the inspection schedule on an either 4-6 month cycle depending on how the first inspection goes. In reality most our inspections are not formal. Good tenants call for maintenance and we use this to get in an make sure the tenant is taking good care of the property. We support this with our monthly drive-by's (Once your logged in take a look at tasks). Our idea is that if the front yard looks good and the last inspection went well why invade the tenant's privacy. If we think that the tenant needs an inspection more often than 4 months we move them out and look for another tenant. 

This the basics on  our inspection cycle. There is a Warning and Notice stage in some of this but that is another letter. Let us know if you have questions.

Bathrooms - How to Keep from Falling In Part I

Bathrooms - How to Keep from Falling In

If you have not been in the landlording business long you will soon enough understand how the bathroom is potentially the most expensive room in the house. From minor repairs to dripping faucets to a major dry-rot rehab the bathroom can drain your bank account. However, a little prevention can go a long way towards keeping the expenses low. When doing your regular inspections make sure you are looking at the following items:

• Look under the sink/s. I find leaks regularly that the tenants did not know about. Feel the pipes with your dry hand and look around the plethora of stuff we all keep under there. Also, look for rust stains and water marks on the drain pipes.
• Look around the toilet and look for both condensation (condensation can produce a lot of water in the winter) and leaks. Again, look at the supply line coming out of the wall or floor. Next, look at the flooring around the toilet and step hard around it. Feel for soft spots in the floor and look for discoloration of the vinyl. If the toilet is caulked make sure that there is at least one gap in the caulking (usually in the back) where water can escape if the wax ring leaks.
• Look at the caulking between the tub and flooring and the molding next adjacent to the tub. The easiest and most cost effective repair is just keeping this joint caulked. (Use only 100% silicone caulk) A lot of water can run on the wrong side of the curtain, and in some cases the tenants seem to be confused on which side of the tub the curtain should hang. :)
• Look at the faucets and tub/shower valves. Look for rust or water stains around the handles and dripping faucets.
• Inspect the tub/shower surround. If it is tile check the grout. Is is flaking out of the joint then water is getting behind the tile or the backing has been compromised. This could mean your tile is over drywall and if that is the case start saving your money to replace the tub surround. If you have a fiberglass or cultured marble surround you only need to check the caulking seems and the base for cracks.
• Check the exhaust fan. We see mold in the bathrooms when either the fan is not functioning or the tenant does not leave it on long enough to remove the humidity from showering. Consider adding a timer as it can take longer than an hour for a fan to completely exhaust the bathroom.
• Last, look at the condition of the paint, fixtures, flooring, counter tops and mirror. It may be time to upgrade or just upkeep.

This whole process should only take about ten minutes. Regular inspections and prevention is really cheap and will save you thousands. Dry-rot and water damage is very insidious and can go along slowly destroying your property for months and years. Let your tenants know you want to be informed about the smallest problems.

Without spending to much time in the bathroom, next month we are going to go over a few tips and tricks to make you bathroom rehab last longer. Stay tuned!