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How Much Should I Charge For Rent On My Income Property?

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By Joe Arias

Becoming a real estate investor gives a person the fantastic opportunity to generate passive income, but if you want to be successful, you need to have a strategy. According to HUD, there are between 10 million and 11 million individual investor landlords managing an average of two units each in the United States. While it may be somewhat easy to become a landlord, it is challenging to be a successful landlord who brings in a profit each month.

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Being a landlord should be treated like being a business owner and should include a business plan. Your income property business plan should include things like financing options, marketing strategies, budgeting for maintenance and repairs, and your long-term goals. It should also include identifying your ideal tenant but be wary of fair housing laws. When determining who you would like to rent to helps you narrow down the type of amenities your property should have. Prospective tenants may demand specific amenities like a pet-friendly rental with a yard or that the unit is within close proximity to public transportation and schools. These amenities may call for higher rental rates but could also come with their own headaches and affect your return on investment.

Residential Properties

Single-family home or townhome, condo, or manufactured, pricing strategies are pretty much the same. Many landlords use the 1% rule. This rule suggests charging 1% of the home’s value for rent. In reality, it is not that simple and there are other factors to consider.

Where Should I Start?

Whether you are getting ready to purchase an investment property or preparing to put it on the rental market due to tenant turnover, when deciding how much to charge for monthly rent you need to figure out a rental price that is high enough to cover your mortgage and operating expenses while ultimately giving you extra cash each month. But, you can’t just set a rental rate based on how much profit you’d like to make on your rental property. Unfortunately, it doesn’t work that way. Many factors go into determining how much to charge for rent. Let’s discuss them.

First, let’s talk about market rent. Market rent refers to the average rent price for a rental property and is determined by the real estate market value. When you get ready to list your property for rent, it is essential to see what your competition, other landlords, are charging for their rates. Some factors which affect the amount you can charge in rent are:

  • Square footage
  • Number of bedrooms
  • Number of bathrooms
  • Garage or covered parking spaces
  • Pet policies
  • Property type (single-family home, condo, etc.)

It is a good idea to research property values in the area where your property is located. This part of the process should be pretty simple. You can either look at one of the many online home search websites to do your research or ask your real estate agent to give you access to an online portal through your local MLS. Either way, you will be able to see what is available in your area filtered out by the homes that have similar features.

Depending on the type of property you have purchased, there may not be an identical comp to base your price on. One way around that is to look at the price per square foot in your neighborhood in properties as similar as you can find. Even if your property is 1200 square feet and the house down the street that just got rented out is 1600 square feet, you can still look at that number to help you determine your rate. So if the 1600 square foot house rented for $2,000 per month, that would make the price per square foot $1.25. You could then base your price on that number by multiplying $1.25 by 1200.

Rental Property Expenses

As we discussed, you cannot just set a rental price based on how much money you need to make in order to cover expenses and generate a profit. At the same time, you need to be aware of your costs so that you can set the price high enough to make a profit. When determining how much you will need to charge for rent each month, there are some additional, not so fun considerations to take into account.

These include:

  • Mortgage payments
  • Property taxes
  • Insurance
  • HOA fees
  • Property management fees
  • Maintenance fees
  • Rental income taxes
  • Utilities

Each of these items are additional expenses that you will have to cover and can vary by city or even neighborhood you purchase in. These fees are typically the same year-round, so it is somewhat easy to put them into your plan when working to determine the monthly rental rate.

Commercial Properties

The process of arriving at a rental rate on your commercial property is similar to that of a residential home.

You will need to look at similar properties to what they are renting for, just like you would with a residential property. In general, you would look at the property’s size, location, and number and type of tenants that the property currently has. In addition to these somewhat basic factors, you also need to consider the following:

Charging by usable square footage: This is the amount of space that the tenant uses alone, not including common areas that any tenant can use. So in an office building, it would be the actual office space versus the building’s lobby.

Leases are much more complicated: There are multiple ways to enter into a commercial agreement lease, here are three primary lease structures:

  • Triple Net – Tenants pay their base rent plus taxes and insurance on the building. These are the most common types of leases.
  • Full-Service Gross – Tenants pay the landlord on fee, and the landlord is then responsible for all other expenses like taxes, insurance, maintenance, and utilities. These types of leases are common in office properties.
  • Modified Gross – Landlords pass on some but not all of the cost of utilities, maintenance, janitorial, etc.

As the landlord, you will have to figure out much to charge for base rent and calculate how much the additional expenses will be. You still want your lease price to be attractive to potential tenants and competitive against other property managers.

Something else to consider is that commercial leases tend to last for more extended periods of time. Typically the lease period can be three to five years, so it is imperative to choose an amount that will hold up to that longevity.

Unless you are a seasoned investor, it may be wise to work with a property manager to help you with the day to day dealings. They can even help you determine how much to charge in rent.

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There is So Much to Consider, and I’m Overwhelmed

Looking at all of these factors is overwhelming. Rental rates can change by the week, and doing all of this research only to find that prices have increased or decreased before you can get the property listed can be discouraging. It is essential to understand why prices change so quickly. Like any other product on the market, supply and demand is always a factor in how much something costs.

Some landlords may choose supply and demand as the only factor in determining a rental rate. Others may place their rates somewhere in between the neighborhood market rate and HUD’s fair housing rate. Whatever strategy you choose, make sure your property stacks up to other properties in the area and you should be okay.

Final Thoughts

Pricing your investment property, be it residential or commercial, is one of the most important factors in being a successful investor. If you do not charge enough to cover all of your expenses, you will lose money making your investment a bust. Very simply, look at the current market rates based upon the size and condition of your property in order to determine how much to charge for rent.

Joe Arias

Joe Arias and his partners have flipped hundreds of properties in the Southern California Region. He has developed cutting-edge systems to simplify and scale the entire remodel process that can easily be applied to flipping, rentals, wholesaling, and other passive income strategies. More recently, Joe founded a real estate investing education company called RealSuccess Investments, allowing him to share his tools and systems with hundreds of up-and-coming investors. 

RealSuccess is focused on education on flipping, rentals, passive income, and wholesaling.

Joe is also a best-selling author. He has written 4 books: Finding your RealSuccess, First Steps to Flipping, R stands for Rentals and Retirement, and Wholesaling Real Estate.

“I came from Argentina when I was 20, I am 40 years old now. I didn’t know anyone, I am CERO generation, usually people say, I am first or second generation but I was the one that crossed the border, no language, no friends, no family, no money, nothing, nada… If I can do it, anyone can.”

From a young latino immigrant  to a celebrated real estate investor, Joe is a true testament to hard work and discipline. As an investor, he has made it his mission to help others achieve financial freedom while enjoying living a life of passion, fulfillment, and empowerment.

RealSuccess Website

www.ourrealsuccess.com

Personal Instagram: 

https://www.instagram.com/joeariasinvestor/

Real Estate Investment- Instagram: 

Instagram: https://www.instagram.com/realsuccesseducation/

Video For Finding Money from All Day Training (10 Hour Seminar)

https://vimeo.com/manage/videos/528446162

1 Hour Webinar

https://vimeo.com/manage/videos/530996751

Amazon Book#1:

Amazon Book#2

Learn live and in real-time with Realty411. Be sure to register for our next virtual and in-person events. For all the details, please visit Realty411Expo.com or our Eventbrite landing page, CLICK HERE.

Kathy Kennebrook Discusses the Secrets of Land Lording

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Image by Schluesseldienst from Pixabay

By Kathy Kennebrook (The Marketing Magic Lady)

You’ve all heard the tenant horror stories from people who have had tenants in properties, but being a landlord doesn’t have to be difficult as long as you learn some strategies for handling your tenants. My husband used to say that handling tenants was like having a group of children that you have to train and discipline. But it doesn’t have to be that difficult.

You do have to make some specific rules for your tenants and stick to them. Every time you change the rules you give your tenants the upper hand. You must also have an iron clad lease that specifically addresses the issues that you may have with tenants including getting your rent paid on time.
rules-1752405_1280

Image by Gerd Altmann from Pixabay

This is one area in which I am steadfast with the rules. I don’t care what the tenant’s situation is, their responsibility is to pay me on time and in full or they are stealing services from you without paying for them. My tenants are responsible for having the rent in our post office box or direct deposited through zelle or paypal on or before the date it is due or they are served with a three-day notice the next morning as required by law where I live in order to begin the eviction process. There are no exceptions. We even have tenants who send their checks to me priority mail to make sure they get to me on time. Most of our tenants have been with us a long time and many pay early.
You must also take the time to pre-qualify your tenants’ right from the beginning so you can avoid some problems right from the start. Don’t just accept a tenant into your rental property because they have the money to move in. Don’t let greed be your guide. Have your tenants fill out a specific rental application. Then you run must a tenant check with a reputable company. Don’t try to do this yourself just by looking at public record. You will miss credit issues and anything that may have occurred out of state. You need to find out the information you need to know about your tenants’ right from the start before renting them your unit.
For example, if the tenant check shows the applicant was just evicted from another premises, this certainly isn’t going to be a tenant you want in your property. Or if your tenant has had recent felony convictions, this isn’t a tenant you want in your rental unit. If your applicant has multiple animals, this is also not someone you want in your rental unit. I will mention however, that I will allow a tenant with a small dog or cat to rent my units. I find that usually a tenant who has a pet that they have had for some time will make a good tenant who will stay longer in your unit.
cat-3266675_1280

Image by Quang Nguyen vinh from Pixabay

I also have a separate pet lease which addresses specific rules regarding pets in my units. The pet lease requires that the dog or cat is an indoor pet and I have an additional non-refundable amount of security deposit for the pet lease and additional pet rent of 25.00 per month. I find that this works out very well. If the tenant gets a pet that is not on the lease, this is grounds for immediate eviction, and we do have someone who checks our units about every 60 days for us to make sure all is well with our rental units.
I also check out where they were living before by going by the address and checking it out and I talk to their previous landlord. I want to see how they have been treating the place where they were living before. If it looks like a pig pen or if they have multiple animals, this is not someone I want in my unit. If they don’t give me this information on the rental application, I won’t even consider them to rent my unit. I know some of this is just common sense but it bears discussion. If a tenant makes it through my rigorous screening process, I also have them pay first month’s rent, last month’s rent and the security deposit either by cash, cashiers check or by money order. I do not accept personal checks for the move-in amounts.
dollar-3313761_1280

Image by Gerd Altmann from Pixabay

During the following months I do not accept personal checks from them for the rent, we only accept money orders or direct deposit. The first time a check bounces for insufficient funds or any other reason, they must make it good immediately or I will immediately begin the eviction process. This is all covered in the lease they have signed. I also make sure that the person I have putting tenants in units for me thoroughly covers all the items in the lease with them before they sign it.
If a tenant does get their rent to us late, they are responsible for additional rental fees of one percent per day. These fees are in our lease as additional rental fees as opposed to late fees since some courts won’t allow you to get a judgment for late fees. Within the body of our lease we also require our tenants to have renters insurance and I want to see proof of the policy before they move in. This way I can’t be held liable for any injuries or the loss of their possessions due to an accident, fire, hurricane or any other natural disaster.
signature-3113182_1280

Image by Gerd Altmann from Pixabay

Additionally, once my tenants sign a lease with me, I will not give them keys until I see proof of utilities in their name for the unit. In certain counties like ours, the landlord can’t turn off utilities in their own name. The only way the name changes on the utilities is with a new lease and then utilities get put in the tenant’s name. This rule may be different where you live, but a lot of the time if the tenant doesn’t pay their utilities it falls back to the landlord. This is just one way for you to protect yourself.
These are just a few of the basic techniques that will make you a happy and successful landlord. Monthly cash flow is a wonderful thing if your properties are managed correctly.

For more information on becoming a successful landlord and finding all the deals you need for your real estate investing business, check out my website at www.marketingmagiclady.com. While you are there be sure and sign up for my Free Monthly Newsletter!!

Wondering What to do NOW In Real Estate? (Part 2)

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Image by Gerd Altmann from Pixabay

By Jimmy Reed

So, what do you do when the market is flooded with so much Competition? How do you really get Wealthy in Real Estate? Getting fed up!?? How about Real Wealth Deals???

Hope you enjoyed the last article! Part 1 of “What to do NOW in Real estate?” As we ended last time, we started to mention VRBO’s vs a Standard Rental. We also talked about Hot Markets and that the Dallas/Fort Worth (DFW Area) is one of the Hottest in the country. Since the last article we have also had the Covid-19 Virus which at this time has literally shut our economy down. The timing however is really interesting since we are now about to go into a market that is only 3 hours away from the DFW market and growing at the same pace. Now last time I talked a lot about the Granbury market which was only 30 minutes South of Fort Worth where we are building brand new Constructions all Brick for Rentals. But let’s now switch the mind set to VRBO where we can Double & Triple our Cash Flow! You heard me right! So now we move North of DFW to Broken Bow Oklahoma. And to help me out I want to introduce you to a friend, former student, and a Rock Star on VRBO’s in Broken Bow, Miss Kelli Haus. I asked Kelli to help contribute to part 2 of this piece since she has literally taken the VRBO in Broken Bow to a new level. So first keep in mind we are looking at cabins now verses a standard house. We are looking at Nightly rent vs Monthly rent. And this is where you will see how you could nearly triple your Monthly Cash Flow with a VRBO in Broken Bow. Now I meet Kelli a few years ago when she signed up for our Platinum Program here in the DFW area. She soon informed me she was wanting to move into Vacation Rentals, I told her it was not my specialty at all. A few years later and Kelli has become a Rockstar of VRBOS! So here is a little about Kelli, and some info on Broken Bow, OK.
The How Toos of Finding Deals
Kelli has 6 years’ experience in the real estate field, she is known as the Beavers Bend Realtor. However, Kelli does more than just help her clients buy and sell cabins, her secret sauce is her step-by-step plan for her clients so they can not only enjoy a vacation at their cabin but also turn it into a big money maker. Kelli uses this same plan on her own Beavers Bend investment properties so she practices what she preaches, and she can not only show you how the plan has worked for her, but so many of her clients. Her ideal client is someone who is looking to make memories and extra money.
Hello all, I’m Kelli Haus and I am a cabin investor in Broken Bow, OK and a full time Realtor in the Broken Bow area, specializing in helping families’ and investors purchase an income/second home/vacation luxury cabin that pays for itself.
Did you know that according to a recent VRBO report “71% of millennial travelers say they consider staying at a non-traditional vacation rental”? VRBO rentals are up 30% from last year! Broken Bow, Oklahoma. I am going to assume you’ve never heard of it. It is an outdoorsman’s paradise! It is only three hours away from the DFW metroplex. A perfect family getaway that makes most feel like they arrived in Colorado. The area is also known as Hochatown, Oklahoma which is a few miles north of Broken Bow. Through good economies and bad economies, this place is always a hot market with vacationers packing the area every chance they can. As long people in the DFW want a quick getaway from the metroplex, this market is going to continue to be on the rise until there are enough cabins to accommodate the mass influx of vacationers. Hochatown is approximately 95% luxury investment cabins that are occupied by residents from Texas, Oklahoma, Arkansas and Louisiana that flock here YEAR-ROUND. That’s right, there is not a down season! VRBO’s travel trend report projects that the Broken Bow/Beavers Bend State Park lake area tourism will grow 50% in 2020. If you have never heard of Broken Bow, Oklahoma your first question is going to be why the heck would anybody want to invest in this remote area? The answer is Broken Bow Lake is one of the most gorgeous lakes in the country. Its pristine natural shorelines are not riddled with boat docks and lake houses. Ten years ago, this lake was a hidden gem of a secret for the locals to enjoy. This lake is crystal clear and provides some of the best fishing in the country. The lower Mountain Fork River feeds off the lake has some of the best fly-fishing in the world. Believe it or not most people never even see the lake when they rent a cabin. They’re too busy hiking some of the most gorgeous trails in the state park, hitting up the local breweries and wineries, roasting s’more‘s on the campfire, renting ATVs, horseback riding, kayaking or canoeing on the river, grilling out on the back porch and hitting the cabin hot tub! The Choctaw Nation has recently purchased 700 acres here in Hochatown and they will be building a family friendly casino right here amongst these luxury cabins. This casino is going to draw so many more visitors to the area that have not heard about Broken Bow. It’s rumored to believe that only 50% of the DFW metroplex is aware of Broken Bow. There are more than 7 million people in DFW and Broken Bow is growing in correlation with the growth of DFW. There is certainly a buzz in Texas about Broken Bow and in my opinion, there are not near enough cabins in the area to support the demand of people that want to vacation here.
The How Toos of Finding Deals
Even during this Covid crisis, all the cabins here are full of people “sheltering” at a cabin. And there has been no slowdown of investors inquiring about investing in Broken Bow either.
The question I get asked the most often is which is the best size, price, and type of cabin for an investment? There is not a good answer to that question. One-bedroom cabins are booked more nights per year but at a lesser nightly rate. The big cabins that sleep 25 to 30 people are booked less nights per year but at a much higher rate, up to $2,000 a night!
If managed properly every cabin in Broken Bow can be paid off in 8 to 10 years. So, would you rather have a $300,000 one bedroom or a $1.5 million cabin paid off in 8-10 years? Every single cabin here pays for itself every…single…month. Some months, like February and April, can be a little slow but this year they have not been at all! Each year this area is growing more and that means more net profits, even in what used to be known as the slow months. Cabins are booked every single weekend, every holiday, and every time school is out of session, I encourage all cabin owners to raise their nightly rates 10-30%. Both of my two-bedroom two bath cabins that have a loft, both sleep eight or nine people are booked 18 days a month on average year-round. June and July are the busiest months of the year. Both of my cabins were booked solid in the summer months except for the rare times of a one-night opening between bookings.
The How Toos of Finding Deals
Generally speaking, a cabin will make 45% net profit. If you hire a management company, they are going to expect 25% to 40% of your gross income. 95% of my client’s self-manage their cabins with my proven method of doing so. But that is a whole other and I am certainly happy to answer questions like them, such as:
  1. How do I manage my cabin from 2000 miles away?
  2. How do I minimize phone calls from my guests to the point where I do not get any?
  3. How do I maintain five-star reviews on Airbnb and VRBO?
  4. What do I do if I have a maintenance emergency in the middle of the night?
  5. Do you share your team of people on the ground in Broken Bow to help Cabin Owner’s?
So, let us talk about real numbers. I purchased my “Kiss and Angel Good Morning Cabin” in April 2018. It came fully furnished from a new construction builder with a sales price of $310,000. It appraised for $329,000 and today it would appraise for $360,000 or more. I put 10% down. Mortgage, taxes, insurance as well as PMI totals$2,050 a month. Property taxes are low at about 1%. My monthly average expenses to run my cabin business is $500 a month.
The How Toos of Finding Deals
In my first year I paid down the mortgage with 100% of my profits. I did not pay my mortgage down in 2019. Instead, I used my profits in 2019 to purchase my second cabin. Right now, I have $100,000 equity in this cabin. Nightly rates are between $199 and $350 a night. My first year I grossed $50,000 with $20,000 net profit. My second year I netted $27,000 profit.
I encourage my clients to purchase new construction or a cabin that is less than three years old. That is another discussion for a different day. About70% of cabins for sale can be found on Realtor.com. Not all real estate agents list their cabins on any MLS. New construction cabins cannot be found online anywhere. You must have a connection to a builder to find those hidden gems! 80% of my clients purchase a new construction cabin that has not yet been completed.
The How Toos of Finding Deals
I know I have just scratched the surface with this article and there are many more questions to be asked. I am extremely grateful I discovered the Broken Bow area. I have two young children and with the two cabins that I do own now, I will be able to use the $2,000 monthly net profit to pay for my children’s college education.
I do not see this market slowing down anytime soon as I do not see the DFW market slowing down. It has been rumored that Broken Bow will be the next Branson, Missouri, or Lake Tahoe.
I do not have enough cabins to show my clients even during this possible recession. Construction has not slowed down either. Can you think of a hotter market? I hope to hear from you soon, and Thanks Jimmy for allowing me to contribute to your article! Well I hope you just realized the opportunity you have been presented with. How regardless of where you live you can own a Vacation/Investment Cabin that can produce up to nearly Triple the Cash Flow vs that from an ordinary rental. Yes, I know if you are Old School you understand Monthly Rentals. Trust me I’ve had rental for over 30 plus Years! But go back and read the last article “Part 1”Remember the Make Money vs Wealth? Wealth is what you are looking for in real estate. But I understand if you want a rental, we have them for you as I said back in the first article down in Granbury. By the way you could VRBO the Granbury properties. See these articles were written to open your eyes to see the opportunity of not so much what you invest in but where! Hot, Emerging Markets will always out pace Appreciation and Cash Flow due to demand, and the location with in what I call the Hot Zones. Texas is a Hot Zone always has been and even more so today. Make sure you go back in read the first article from last month in Realty 411. Refresh yourself to what our Goals were. Buying and Selling vs Buying and Holding, real Wealth! Look back at some of those trainings we offer on my site at www.JimmyReed.net. Create some Cash but parlay that into Creating Wealth through Rentals are maybe even VRBO’s so you can Double & Triple that Cash Flow. Well I hope this opens your mind up to investing in Hot Zones. To understand so many people come from all over the World to invest in America because of all the opportunities. My question to you are you willing to travel a few states and end up in the middle of the country and the most lucrative Hot Zone, TEXAS! So if you’re still riding the fence here’s a thought make sure to keep an eye out in the magazine and Realty 411Marketing emails so you can make it to Texas for the Lone Star Expo! Yes in October the Lone Star Expo is right here in my backyard, Arlington, TX. And if you remember from the first article we plan on doing a bus tour down to Granbury to look at those New Construction Rentals. Who knows Kelli may be at the Expo to answer questions about Broken Bow. Fact stay a few extra days and rent a cabin in Broken Bow! In Closing, the main thing is position yourself so you can maneuver positively so no matter where the market turns. If you keep your eyes on the market and not so much on the quick buck, you can become very successful even Wealthy at this real estate game! Be Blessed with Success! Jimmy Reed
jimmy

Jimmy V. Reed

Jimmy V. Reed of Fort Worth, Texas has been investing in real estate since 1987.  In 1991, he started conducting full-day training sessions on Wholesaling.  He then began teaching and mentoring others throughout the country. He is currently the founder of the Fort Worth Real Estate Club www.1REclub.com and has his own real estate training company that includes Wholesale, Probate, Mentoring & a Biblically based Debt Free training course and more! More info available at www.JimmyReed.net

The Secrets of Being a Successful Landlord

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By Kathy Kennebrook (The Marketing Magic Lady)

You’ve all heard the tenant horror stories from people who have had tenants in properties, but being a landlord doesn’t have to be difficult as long as you learn some strategies for handling your tenants. My husband used to say that handling tenants was like having a group of children that you have to train and discipline. But it doesn’t have to be that difficult.

You do have to make some specific rules for your tenants and stick to them. Every time you change the rules you give your tenants the upper hand. You must also have an iron clad lease that specifically addresses the issues that you may have with tenants including getting your rent paid on time.

rule-1752625_1280This is one area in which I am steadfast with the rules. I don’t care what the tenant’s situation is, their responsibility is to pay me on time and in full or they are stealing services from you without paying for them. My tenants are responsible for having the rent in our post office box or direct deposited through zelle or paypal on or before the date it is due or they are served with a three-day notice the next morning as required by law where I live in order to begin the eviction process. There are no exceptions. We even have tenants who send their checks to me priority mail to make sure they get to me on time. Most of our tenants have been with us a long time and many pay early.

You must also take the time to pre-qualify your tenants’ right from the beginning so you can avoid some problems right from the start. Don’t just accept a tenant into your rental property because they have the money to move in. Don’t let greed be your guide. Have your tenants fill out a specific rental application. Then you run must a tenant check with a reputable company. Don’t try to do this yourself just by looking at public record. You will miss credit issues and anything that may have occurred out of state. You need to find out the information you need to know about your tenants’ right from the start before renting them your unit.

magnifying-glass-1607208_1280

For example, if the tenant check shows the applicant was just evicted from another premises, this certainly isn’t going to be a tenant you want in your property. Or if your tenant has had recent felony convictions, this isn’t a tenant you want in your rental unit. If your applicant has multiple animals, this is also not someone you want in your rental unit. I will mention however, that I will allow a tenant with a small dog or cat to rent my units. I find that usually a tenant who has a pet that they have had for some time will make a good tenant who will stay longer in your unit.

I also have a separate pet lease which addresses specific rules regarding pets in my units. The pet lease requires that the dog or cat is an indoor pet and I have an additional non-refundable amount of security deposit for the pet lease and additional pet rent of 25.00 per month. I find that this works out very well. If the tenant gets a pet that is not on the lease, this is grounds for immediate eviction, and we do have someone who checks our units about every 60 days for us to make sure all is well with our rental units.

puppy-1903313_1280I also check out where they were living before by going by the address and checking it out and I talk to their previous landlord. I want to see how they have been treating the place where they were living before. If it looks like a pig pen or if they have multiple animals, this is not someone I want in my unit. If they don’t give me this information on the rental application, I won’t even consider them to rent my unit.

I know some of this is just common sense but it bears discussion. If a tenant makes it through my rigorous screening process, I also have them pay first month’s rent, last month’s rent and the security deposit either by cash, cashiers check or by money order. I do not accept personal checks for the move-in amounts.

During the following months I do not accept personal checks from them for the rent, we only accept money orders or direct deposit. The first time a check bounces for insufficient funds or any other reason, they must make it good immediately or I will immediately begin the eviction process. This is all covered in the lease they have signed. I also make sure that the person I have putting tenants in units for me thoroughly covers all the items in the lease with them before they sign it.

If a tenant does get their rent to us late, they are responsible for additional rental fees of one percent per day. These fees are in our lease as additional rental fees as opposed to late fees since some courts won’t allow you to get a judgment for late fees. Within the body of our lease we also require our tenants to have renters insurance and I want to see proof of the policy before they move in. This way I can’t be held liable for any injuries or the loss of their possessions due to an accident, fire, hurricane or any other natural disaster.

sale-3701777_1280Additionally, once my tenants sign a lease with me, I will not give them keys until I see proof of utilities in their name for the unit. In certain counties like ours, the landlord can’t turn off utilities in their own name. The only way the name changes on the utilities is with a new lease and then utilities get put in the tenant’s name. This rule may be different where you live, but a lot of the time if the tenant doesn’t pay their utilities it falls back to the landlord. This is just one way for you to protect yourself.

These are just a few of the basic techniques that will make you a happy and successful landlord. Monthly cash flow is a wonderful thing if your properties are managed correctly.

For more information on becoming a successful landlord and finding all the deals you need for your real estate investing business, check out my website at www.marketingmagiclady.com. While you are there be sure and sign up for my Free Monthly Newsletter!!

U.S. Department of Justice Files Sexual Harassment Lawsuit Against Landlord

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By Stephanie Mojica

The U.S. Department of Justice recently filed a lawsuit against an Iowa landlord alleging that he sexually harassed and committed acts of retaliation against a female tenant.

The defendants in the lawsuit are Juan Goitia and 908 Bridge Cooperative in Davenport, Iowa, according to a press release from the Department of Justice. The reported incidents occurred between March and August 2018 and are blatant violations of the Fair Housing Act, according to the Department of Justice.

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Goitia, an owner and manager of residential properties, allegedly touched a female tenant’s body on multiple occasions without her consent and made repeated and unwanted sexual remarks, according to the Department of Justice. When the woman filed a fair housing complaint with the Davenport Commission on Civil Rights (DCRC) and the U.S. Department of Housing and Urban Development (HUD), he engaged in acts of retaliation against her, according to the Department of Justice. The press release did not elaborate upon what those alleged acts of retaliation were.

“No woman should have to endure sexual harassment to keep her home,” Assistant Attorney General Eric Dreiband of the Civil Rights Division said in the press release. “The Fair Housing Act protects tenants from sexual harassment and retaliation by their landlords, and the Justice Department will vigorously pursue those who engage in such reprehensible and illegal conduct.”

After the DCRC and HUD investigated the woman’s fair housing complaint, they forwarded it to the Department of Justice for further action. The lawsuit filed on June 29th calls for the woman to be compensated financially. Also, the Department of Justice asked for a court order to be issued to prevent further discrimination against the woman.

“Women have a hard enough time finding a decent affordable place to live without having to be subjected to unwanted sexual advances,” Assistant Secretary Anna Maria Farias of HUD’s Fair Housing and Equal Opportunity Office said in the press release. “HUD applauds the action the Justice Department is taking in this matter and remains committed to working together to protect the housing rights of women when those rights are violated.”

Interview With Bruce Norris of The Norris Group, Riverside, California

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By Christina Suter, FIBI Pasadena

I recently spoke with my industry colleague and good friend Bruce Norris about what it took for him to break through from who he was as a young man to the guru he is today. Bruce is an active investor, hard money lender, and real estate educator with over 30 years of experience. He is the founder of The Norris Group and has been involved in more than 2,000 real estate transactions as a buyer, seller, builder, and money partner. Bruce has dedicated himself to understanding the economic field in Southern California, and it shows in his work.

Photograph of Bruce Norris, courtesy of Christina Suter.

Photograph of Bruce Norris, courtesy of Christina Suter.

Bruce was married at 17, fired five times in a row, and eventually got the hang of getting a job. After reading How To Win Friends and Influence People, Bruce said he learned about avoiding the acute angle, which is finding a way to find an argument in everything. The book taught him to diffuse it and to enjoy the skill of learning to diffuse it.

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Bruce then got a job in sales, where he sold electrical supplies for six years. One day he was invited to join a man to watch his attempt to buy a house wholesale. After the house was purchased, Bruce realized his life experiences could translate into the real estate buying business. In his electrical business, Bruce sold supplies to people who already had suppliers. In real estate, he convinced people to sell their house to him because he had cash and people could close in a few days.

One of the skills Bruce has mastered is the power to close a deal. When he negotiates with a seller, he lets them know that based on his experience, things work or they don’t, so his offer leaves with him. Bruce tells sellers if they call him back the next day, he will let them know that he’s no longer interested because he wants the power to close and know he’s telling them the truth.

Bruce has earned a reputation in the industry based on his integrity. He will often spend the first 15 minutes speaking with an owner just suggesting things for them that have nothing to do with him making a profit. Bruce will ask about their situation and make recommendations that don’t always lead to him, as a cash buyer, closing the deal.

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Someone once referred a couple to go talk to him. He visited the couple for two hours. During that meeting, the husband made it clear to Bruce that he desperately wanted to move to another state, Tennessee, where he had a job waiting for him and his wife. The husband wanted such a full price without commission that he basically got in his own way, Bruce remembered.

There was an underlying desperateness to the man’s situation, so Bruce told him he could sell his house to him that night if he was willing to take less for his house. Bruce closed on their house.

Ten years later, that couple’s 21-year-old son visited his office and informed Bruce that he had been causing trouble in their house, due to his gang involvement. He told Bruce that had if he not bought their house, they wouldn’t have been able to move — and that kid would have ended up dead. He asked Bruce to teach him what he knew and how he was able to purchase his childhood home. That kid went on to open an office on Magnolia and Riverside and bought houses.

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The first foreclosure Bruce ever door-knocked was an elderly woman who had $13,000 of debt on a $64,000 house. Because he didn’t want to make the woman homeless, Bruce was able to get the lender to arrange a loan for her — largely thanks to the equity she had in the house. Therefore, she was able to keep her house.

Bruce said he wants both sides of that when he’s a buyer. He wants to be able to look across the table and if he can help the seller make the decision he’d make if he were in their situation, he also wants to be kind enough to let them know when they’re making a mistake.

I asked Bruce how he switched from real estate as a job to having freedom and creating financial stability.

“It really wasn’t a priority to me, so I kept very little inventory for rentals for the first 15 year plus years; I just flipped,” he said.

Bruce added that Jack Fullerton was influential in saying, “That’s great, but what happens if you get hurt or sick? How are you going to have income coming in?”

Bruce said he took that question to heart. While on vacation in Maui, he listened to Robert Kiyosaki’s Rich Dad, Poor Dad. Thus, he learned Kiyosaki’s four ways to make income quadrant.

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Bruce said he was always working for someone else or self-employed (the left side of the quadrant) — but on the right side of the quadrant, he was attracted to the two that involved running a business that didn’t need him and collecting checks from investments.

From that vacation on, Bruce changed the way he made income. He said he’s not self-employed because when he goes on vacation, his business can run without him. Thus, he runs a company. Bruce’s loan business, education business, and rentals all started to run without him, and he said he’s probably the least needed person at The Norris Group.

According to Bruce, it took him until late 2005 for his rental income to allow him to feel financially free. He had to think long term and at age 33, a $30,000 profit from a flip was more appealing to him than a cash flow of $200. Bruce said it took him a while to want to be methodical with the rental income and to actually fulfill that vision.

Bruce and The Norris Group can be reached at www.thenorrisgroup.com

 

Christina Suter

Christina Suter

As the founder and lead consultant of Ground Level Consulting, Christina L. Suter brings two decades of real-world experience as a serial small business owner and real estate investor. She developed her extensive financial and operational skills firsthand as she faced and overcame each difficulty that appeared along the way. As a result, she started up, managed and sold several businesses successfully, while developing an extensive real estate portfolio.

In 2002, Christina made the decision to leverage her experience into helping other small business owners and property owners through a consulting practice that works the way an entrepreneur works, dealing with the pressing problems of a business on the ground level and in real time. Since then, she has supported numerous companies throughout southern California and the western United States move beyond surviving to thriving.

Christina’s solid background and education–including a Bachelors in Business, an Associates in Teaching and a Masters in Psychology–strongly influence her work with your company as a Ground Level client. Not only does she have a keen insight into what will make or break the success of your business, but she can teach you the skills you need going forward. And she does this in a warm, supportive, non-judgmental way that is always highly respectful of your personal values.

U.S. Single-Family Rental Home Market Poised for Near-Term Real Estate Growth Opportunities, According to SVN | SFRhub Advisors

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By Ruth Seigel

Abrupt global economic downturn caused by COVID-19 leads investors to seek refuge and diversification
in opportunistic CRE asset classes growth, risk-stabilization and yield.

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Phoenix, AZ – (April 16, 2020) – As the world grapples to tame the coronavirus pandemic and overturn the economic effects of this unprecedented event, commercial real estate (CRE) investors are monitoring all asset class financial positions to lessen short-term portfolio risk while augmenting investments for long-term growth. SVN | SFRhub Advisors, along with industry experts, predict ongoing consumer demand for housing will position single-family residential (SFR) rentals as an investment portfolio standout. A CRE brokerage firm, SVN | SFRhub Advisors, dedicated solely to SFR/BFR (Build-for-Rent) portfolios recorded a 650% uptick in investment activity since mid-March 2020 for SFR/BFR portfolios on their technology platform, SFRhub.com, averaging 10,000+ listed homes.

Recent data from John Burns Real Estate Consulting (JBREC) outlines CRE sectors most likely to be affected following the pandemic, especially in the short-term, are hospitality, retail and office/co-working. Conversely, JBREC states SFR (while not unscathed in the short-term) should be positioned for faster market recovery and a better long-term play. Housing rental defaults will prove painful in the short-term, but the low supply of newly built rental homes in most markets, and capital seeking safety, yield and inflation hedge, should help SFR recover earlier than other residential real estate asset classes.

Jeff Cline

Jeff Cline

“Investors have reaped financial advantages of a 10-year bullish marketplace, notably the past few years with SFR portfolios, and the newer BFR market,” said Jeff Cline, executive director and principal of SVN | SFRhub Advisors. “For the first time in U.S. history, rental household growth outpaced U.S. home ownership.” He added, “Looking ahead, consumer economic, lifestyle, and work-at-home popularity indicate global investors’ near and long-term outlook for capital growth and income opportunities in single-family detached homes for rent is better than it’s been for several years.”

BFR communities encompass single-family homes built from the ground up specifically for renters and not home owners. These homes help to fulfill the vast housing need and rental shortage occurring across the U.S. According to JBREC, recently surveyed BFR projects had a very strong 97% stabilized occupancy rate prior to the COVID-19 pandemic.

U.S. homebuilders may turn to REITS, private equity and individual investors to purchase completed or near completed single-family communities for rental investment should the new home buyer market continues to retract. “For the first time, we now have several private capital group clients with tens of billions of dollars to specifically invest in the BFR space,” said Michael Finch, executive vice president of SVN | SFRhub Advisors.

Michael Finch

Michael Finch

Demand from millennials and older adults/retirees has destigmatized renting and touted SFRs’ benefits like increased space, yards and amenities representative of living in a single-family detached home. Skyrocketing unemployment, job uncertainty, and hefty student debt loans imply the SFR/BFR market should remain strong among millennials as home ownership moves farther out in time and remote working becomes more popular.

Cline notes, “SFR/BFR investors’ main concerns are rent revenue and occupancy. In the short-term, unemployment may impact rent rather than occupancy issues. As the economy recovers, demand for SFR/BFR will be a favorite among alternative investors with capital on the sidelines seeking refuge and stock market diversification for growth and income.”

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About SVN | SFRhub Advisors

SVN | SFRhub Advisors, based in Phoenix, is an independently owned and operated SVN® office. SVN comprises over 200 offices with 1,600 advisors. SVN | SFRhub Advisors is the only national single-family residential (SFR) & Build-for-Rent (BFR) dedicated brokerage that introduced the first-to-market digital commercial real estate fully transactional platform, SFRhub.com. SFRhub.com is the only SFR/BFR industry data provider with clean and verified data. SVN | SFRhub Advisors currently features a pipeline of over $2 billion SFR/BFR investment portfolios consisting of five or more homes and is also a member of the Forbes® Real Estate Council.

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Ruth Seigel
President – RS Marketing & Assoc.
[email protected]
602 320 4182

Real Estate Investing: A Market Correction is Coming

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By Tim Houghten

It’s inevitable. A market correction is coming. The market has been on a high for years now. In 2018 alone, the Dow Jones Industrial Average broke a record high 15 times. If history has taught us anything, it’s that the market cannot sustain those highs for that long without a correction. Real estate markets across the country are still very hot. Even with the “cooling” that some markets are seeing, real estate prices are still well above records and competition is hot. “A cool-down has been predicted for over in a year in our local market. However, I’ve yet to see it. Sure there are some longer list times for sellers but properties are still selling in record time over asking price. It’s still a hot market,” says Eric Jones, Director of Sales and Marketing for Freedom Real Estate Group.

With all that being said, the question on every wise investor’s mind: how can I prepare myself for the next recession? The short answer, diversify. The long answer, diversify into buy and hold, long-term strategies.

“The short-game (fix and flip) is good. It’s instant return. But you get hit hard by the tax man. Buy and hold has some of the best tax advantages of any asset class,” Jones stated. “Depreciation, property taxes, mortgage insurance and more are all deductible expenses. Plus, with fix and flips, it’s simply not a long-term strategy. It’s not a way to build true wealth.”

To lessen the risk of any big swing in the market, the answer is to diversify your investment portfolio so all your eggs aren’t in one basket. The problem many individuals faced in 2008 was that most of their 401k or other retirement accounts were tied up in stocks and mutual funds. When the market tanked, so did their accounts. Now imagine if half of those funds were diversified into buy and hold real estate. For many, the outcome could have been vastly different. Here’s why.

The key to cash flowing, rental properties is that even during a down economy, they’re still cash flowing at the same amount. In some cases, even higher. Let’s look at it this way. If you were getting an 8% return on your stock investments, and the market crashes, you’re likely going to be reduced to 2%-4% if you are lucky. With rental properties, the rent amount stays the same. Your mortgage stays the same. Your property management fees, if you have them, stay the same. Essentially, if you were getting 8% returns on your property before, you’re still getting that. In a down economy, rents rarely go down. You may not be able to get rent increases during that time, but you will at least have a steady, consistent amount of cash coming in each month.

Rental properties tend to weather a down market in a consistent or even appreciating way. Not necessarily appreciating in value of the asset but appreciating in terms of cash flow being received. In a bad economy, a few things are happening. People simply aren’t buying homes. Credit is tighter. People are scared. The pocketbook is squeezed. Instead of purchasing, individuals and small families tend to continue renting during a recession. In addition, those that may be losing their homes to a foreclosure turn to single-family or duplex style rentals since it’s more private and familiar than a large apartment complex. Therefore, demand may actually increase in a down market which is a huge win for rental property owners.

With all that being said, a down market is definitely not the time to sell your rental properties. It’s a buy and hold strategy. During a down market, it is always best to hold these properties unless there is some absolute reason you must sell. When the market begins to climb again, then you may want to consider selling to upgrade to another investment property in a better neighborhood or better yet, purchase two and double your cash flow.

The best part of investing in rental properties is investors are wealth building while cash flowing. Very few investments offer this kind of opportunity. With a buy and hold strategy, you are receiving the benefit of monthly cash flow while also building a portfolio of tangible assets that will always – no matter the market – have value. “If you have the right plan, with a decent amount to invest, you can quickly scale up to a very healthy portfolio. We worked with a dentist who had $400k to invest and wanted to receive $10,000 a month in cash flow so he could retire. We built a plan and got him to his goal in three and a half years. He was able to retire early. However, not only did he keep receiving the cash flow each month, now he has tangible assets that he can sell off if he ever needed to and can pass on to his children and grandchildren,” Dani Lynn Robison, Co-Founder of Freedom Real Estate Group stated.

Something else to consider is how you are using the power of inflation to your advantage. Most 401k plans aren’t able to keep up with inflation. With the small returns and high managements fees, unless you are able to invest a lot in those funds, you may not even be able to keep up with the rate of inflation. However, with rental property, you are working with inflation to win in two ways. First, your mortgage payment doesn’t change. Let’s say when you purchased the property it was a $500 per month payment. If the market tanks, it’s still a $500 payment on a fixed rate loan. If the market is great, same payment. When the market is doing well, your asset, if all goes as planned, is increasing in value. You’re actually earning value on the asset while effectively reducing the value of the money you’re paying due to inflation. Second, you will likely be able to increase the rental amount between 1%-5% per year. That’s additional cash flow and value you will be receiving yearly.

Finally, it’s important to note that this is an investment and with any investment, there is inherent risk. No investment is guaranteed. However, real estate is one of the most proven, asset-based investment classes in history. Most millionaires were either made through investing in real estate or find large value in investing in real estate. As you explore this investment opportunity, look for markets that do not have super highs or super lows in market crashes (like 2008). States affected greatly were Florida, California and Arizona. One of the cities most notorious for being hit hard in the crash was Las Vegas. These may be markets to steer clear of. If a market crash occurs again, it may cause migration out of those areas resulting in rent losses. “Consider markets that may seem ‘boring’ like many in the Midwest including our market – Cincinnati and Dayton, Ohio. These have proven to weather a down economy and not have big drops in real estate values or population. These are the markets where you truly win.” Eric said.

Diversification is the key to weathering a down turn in the market. More specifically, investing in buy and hold rental properties not only is a proven strategy to survive and even thrive in a down market, but one that holds many positive attributes such as consistent cash flow, numerous tax benefits, and true wealth building.

HOW TO DEAL WITH DAMAGES DONE TO YOUR PROPERTY

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By Glenn Mananeng

To some landlords, owning a rental property is not only an investment, but it can also be their sole source of income to feed their own family. There can be times where being a landlord can be too much especially when dealing with problematic tenants. A common problem that owners have to face is dealing with the damage left by tenants. Just because you have tenants it doesn’t mean you have nothing to worry about so you should just sit on your couch and wait for the rent money. Any major damage done to your property is your worst nightmare. Repairing it is one thing, dealing with evictions because of the damage done is another headache. Proway Property Management is here to help you out when it comes to dealing with such a problem.

Identify the type of damage done

Give the benefit of the doubt to your tenants. Reevaluate whether the damage done was intentionally or by accident. Knowing why and how the property was damaged in the first place is crucial before making any judgment as a landlord.

Accidental

– no house can last an eternity, your property will also undergo normal wear and tear. This is the usual case, especially when the property has been uninhabited for quite some time. The timing might be awful sometimes but these are not something that we can predict. If this is the case, then it might have been bound to happen anyway in the near future and as the landlord, you are responsible for fixing it. Under the Landlord-Tenant Law, the former is responsible for maintaining the property to keep it safe and habitable.

Intentional

– in cases of a bad tenant, they may leave the property in bad shape especially if they had a negative experience with their eviction. Bad tenants are more or less people who simply don’t want to take any part of maintaining the property. Even if they’re not the owner, they still need to partake in the maintenance of the house to some extent.

The damage has been done. What now?

In situations of involuntary damage, an agreement between you and your tenant should be cemented in order to agree on how to go about repairing the damage. In these cases, you’re most likely facing the brunt of the costs. It doesn’t have to be always but it pays off to be prepared for something unannounced. A sudden faulty heating insulator or problems with plumbing or electrical systems should be fixed right away before any major risks that may put the tenant and landlord harm develop.

If the damage was intentional, however, some serious actions need to be done. That’s why it’s important to take before and after pictures of the property as part of your agreement with the tenant. Although showing the house to them is necessary, taking photographic proof before your tenants settle in gives you the added assurance that the damage wasn’t there before. Generally speaking, the tenant is responsible for covering the cost of repair in those circumstances.

Proper use of the security deposit

Not every tenant agrees to pay for the damage even with hard proof. The security deposit can be used to cover the damages in this case. Under Michigan’s Landlord-Tenant Law, the deposit is limited to the amount equivalent to one and a half month’s rent. The deposit should not be used in cases of wear and tear and should be strictly limited to cover damages due to the negligence of your tenants.

If the tenant moves out or gets evicted, you should return their deposit together with a notice of damage. This itemizes the deductions to their deposit. The notice should be given to the tenant within 30 days after they’ve moved out. Tenants can file a dispute with the deductions about their security deposit within 7 days of receiving the notice.

We differentiated intentional and accidental damage done to the property. We also mentioned that the security deposit can be used for covering the costs of damage done by the tenant to the property if they refuse to pay up. However, it’s easy to mistake damages and routine maintenance wherein the deposit shouldn’t be used to cover up the latter.

For example, the deposit shouldn’t be used just because the property needs a new paint job which it really needs in the first place. If the tenant has been staying for years in the property, adding a new paint job is considered as routine maintenance. However, if the walls were newly painted and the tenant left the walls in a state of filth or even allowed their kids to draw on them, deducting from their security deposit would be justifiable. The verdict whether or not to use the deposit relies on the landlord’s standard practice and the appliance’s life expectancy. An example for a commonly damaged appliance are AC units. These have a life expectancy of 10 years. Replacing the unit doesn’t allow you to use the tenant’s deposit because it’s old and faulty. If the unit was newly bought and damage was done by the tenant, deducting from the deposit is plausible.

If the damage exceeds the amount of the security deposit

After calculating the costs of the damage and the security deposit isn’t enough to cover it, you can file a case in small claims court. Remember, under Michigan Law it is illegal for a landlord to take more than the limited amount of the security deposit. That’s why garnishments (money judgement against a previous tenant that owes you money) is a legal tool that you can use as a landlord in these cases.

It doesn’t matter if it was intentional or not though cause at the end of the day, damages to your property will still give you a headache either way. As much as possible, a landlord should provide a habitable living space for their tenants. Dealing with these problems is part of the long list of responsibilities along with being a landlord. If you don’t want to deal with the said hassles, Proway Property Management is the answer to what you’re looking for. We’ll take care of everything so you can literally sit back and just wait for your money to come. Contact us now by phone: (734)744-5080 or by email: [email protected]

CARING FOR TENANTS WITH DISABILITIES

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By Glenn Mananeng

All tenants have rights to housing and those with disabilities are no exception, additionally, those with disabilities have unique rights under state and federal law. We often hear about people being evicted from the rental property and many of these people are people with disabilities who cannot afford rent or fall behind due to medical bills or low pay from Social Security benefits.

Millions of Americans are affected by disabilities struggle to find a place to rent. In fact, 1 out of 5 people in the U.S. have a high chance of acquiring some type of disability according to the Census Bureau. It is of utmost importance to understand their rights in order to provide a proper place for them to live comfortably.

QUALIFYING DISABILITIES

The Federal Housing Act (FHA) has set a very broad description as to what qualifies as a disability. Under federal law, these disabilities have certain qualities such as:

Must limit one’s major life activities
This covers anything as simple as walking, talking, breathing, manually performing tasks, or caring for oneself. If it significantly affects at least one or more of these activities or something similar, the disability should be considered.

It doesn’t have to be obvious
The disability does not have to be noticeable to other people regardless of how much time they see or spend time with you. For example, a person suffering from asthma may seem normal to anyone unless there is an obvious breathing issue due to an emergent attack. A landlord is not legally permitted to ask a resident or prospective applicant about a disability.

Doesn’t require the use of an assistive device
People with mobility disabilities can still qualify under FHA rules even without the need of assistive devices such as wheelchairs, canes, or walkers. The same also applies for those with hearing impairments where there wouldn’t be a need for a hearing aid.

Physical disabilities aren’t the only ones included
Mental illness, chronic fatigue, and learning disabilities are included as part of the FHA’s definition.

Addictions are included as well
Individuals suffering from drug or alcohol addiction can qualify as long as they are currently part of a rehabilitation program.

EMOTIONAL SUPPORT ANIMALS (ESA)

As the name implies, they provide support and comfort especially for those suffering from mental health issues. They help their owners cope with daily life and alleviates their condition a little bit better. There is a clear difference between a service animal and an emotional support animal.

The former is well-trained to perform specific tasks to support a physically disabled person. One of the most common service animals are guide dogs for the visually impaired. ESAs on the other hand provides support and companionship to people with mental health problems.

If you’re in need of such a companion, you need to request an ESA letter from a licensed mental health professional (therapist, psychologist, or psychiatrist). The letter should confirm your mental condition, explain how limiting the disability is when it comes to day-today activities, elaborate how an ESA helps improve your well-being, and should be signed by the medical professional.

As long as one has an ESA letter, the landlord can’t deny housing to that individual. This means that the landlord cannot charge a pet fee even if the rental property follows a NO PET POLICY.

WHAT IS REASONABLE ACCOMMODATION?

This refers to modifications in the rental property which will enable the tenant with a disability to fully use amenities and features of the home as easy as possible. Some of these may include adding a ramp for wheelchair use, widening of doorways, adding grab bars in the bathroom, and even lowering kitchen countertops.

In the event that the landlord receives government funding to maintain housing, there is a chance that they have to cover the renovation costs. However, if a landlord accepts Section 8 tenants, they would not have to pay for the modification.

If a tenant needs the modification to the property but can’t afford the cost, there are a few resources to help fund it. Local fair housing centers are available in almost every community. In Michigan, most of them are divided into different areas throughout the state from Metropolitan Detroit, Southeast and Mid, Southwest, and West Michigan.

A landlord cannot deny or refuse reasonable accommodation to their rental property not unless it would somehow change the layout of the whole building, be unreasonably expensive or impossible to do so, or would pose a physical hazard to other tenants.

Regardless of one’s situation, no one shouldn’t be denied housing. Landlords should always treat tenants equally despite disabilities. There’s nothing more important than working with professionals who have a deep understanding of Fair Housing Laws, especially people with disabilities.

For additional information about Michigan Fair Housing Laws, you can check out our Tenant Section here. To learn more about property management services that we provide, you can call us at (734) 744-5080 or send us an email at [email protected].