Michael Bjorkman\’s Blog

Two days in a row, two water leaks in a row, both in the ceilings of units we manage.   Both issues also in  condominium/townhome type structures.   The HOA does not cover anything inside the units, so what happens next?

First, be thankful that you hired a professional property manager to handle this situation or you would be living the headache of the self managed.   Second, make sure that you have a home warranty plan in place well before your tenant takes possession.  

One of the homes had such a plan, but the owner delayed purchasing the plan until the tenant moved in.   These plans have a 10-day waiting period.   Wouldn™t you know it, within that time period, the leak sprang up and they are not covered yet.

With a general decrease in home values in our marketplace, many owners are renting out their homes because they œcan™t afford to sell.   As rental property owners, when we decide to rent out our homes, we need to reset our minds to that of an investor.   An investor is more detached from the asset, and the home you are renting out is an asset.   The asset needs to be attractive to the potential renter.  

As homeowners we often overlook many of the smaller items.   Perhaps the paint is a little old, maybe a drawer in the kitchen gets stuck, or if some small item breaks we decide we can live without it rather than repair it.   These items won™t go unnoticed by potential tenants.   Some of these items, like paint, may limit the rentability of the property.   And some others, like stuck drawers or broken items, the tenant will demand to have repaired.

Often times these demands lead the owner to say, œIt™s a rental.   What do they want?   We lived without it for all the years we lived there.   This is the œhomeowner mindset.   You™re envisioning all of your time in the home, the holidays, the kids, the family parties.   Break that habit.

The œinvestor mindset says fix it before it™s a problem, get a good quality tenant in there, and do everything you can to keep them in there.   The longer they stay the lower the vacancy rate you will have.   If your rental property yields $2,000 per month, and it takes on average 45-days to get a new tenant in place, then every vacancy costs you $3,000 not counting leasing fees, cleaning fees, and anything else that™s required to freshen the property for the next tenant.  

The bottom line, take the attitude of the investor.   If there is a repair to be made, make it.   If the home needs painting, paint it (it doesn™t have to be an amazing paint job, it has to be a passable paint job).  By viewing your rental properties as the investments that they are, you will put yourself in a better position to succeed with those investments.