You are previewing Idiot's Guides: Making Money with Rental Properties.
O'Reilly logo
Idiot's Guides: Making Money with Rental Properties

Book Description

On the surface, being a landlord seems pretty simple-you buy property, find renters, and the money rolls in. However, as all too many people have found out, it takes an incredible amount of know-how and hard work in order to be successful at it. Idiot's Guides: Making Money with Rental Properties is written by experts who have made the mistakes, learned the lessons, and have become highly successful at spotting properties with high rental potential, buying them at the right price and time, and finding tenants who pay on time and stay for the long haul. Readers will learn not only how to spot the right neighborhood and property, but how to buy it, when not to buy it, how to find the right tenants, how to manage the money flow, and more. In addition, readers will learn what to do when things go wrong, what legal protections they (as well as the tenants) have, and how to do it all without going broke and losing their minds in the process.

Table of Contents

  1. Cover
  2. Title Page
  3. Copyright Page
  4. Introduction
  5. Part 1: Real Estate Basics
    1. 1 Getting into Real Estate
      1. Understanding Real Estate
        1. Types of Real Estate
        2. Unfurnished Rentals
        3. Corporate Monthly Rentals
        4. Vacation Rentals
        5. Student Housing
      2. Decisions, Decisions
        1. How Much Time Do You Have for Upkeep?
        2. What Are You Willing to Pay Out Each Month?
        3. What Are Your Investment Goals?
      3. Success Story
    2. 2 Ownership Structures and Financing
      1. Types of Ownership
        1. Sole Proprietorship
        2. Partnership
        3. Corporation (“C” Corp)
        4. Limited Liability Company
        5. Individual Retirement Account
        6. Trusts
      2. Making Sense of Mortgages
        1. More Mortgage Matters
        2. Questions to Ask Before You Borrow
    3. 3 What to Look for in a Rental Property
      1. Location, Location, Location
      2. What’s the Price per Square Foot?
      3. What’s the Price per Unit?
      4. How Much Are the Property Taxes?
      5. How’s Area Employment?
      6. What About Crime?
      7. Consider Future Development
      8. Any Amenities?
    4. 4 The Keys to Real Estate Success
      1. Thinking Financially
        1. Cash Flow
        2. Profit and Loss
        3. Leverage
        4. Equity
        5. Investment Life
        6. Appreciation
      2. Other Considerations
        1. Do You Have the Time?
        2. What About the Risks?
      3. The Bigger Picture
      4. The Keys to Profitability
  6. Part 2: You and Your Property
    1. 5 Landlording Basics
      1. Tips for Success As a Landlord
        1. Possess Key Qualities
        2. Keep It Simple
        3. Know the Law
        4. Trust Your Gut
        5. Micromanage Your Property
        6. Focus on Your Tenants
      2. Establish Systems in Place
        1. Maintenance Logs
        2. Keys and Property Access
        3. Emergency Plans
        4. Changing Information
      3. Get It in Writing
        1. Rental Rates
        2. Rental Agreement Versus Lease
        3. Rules and Clauses
        4. Disclosures
        5. Other Policies
      4. Facts About Fido
    2. 6 Preparing Your Property for Tenants
      1. Making Your Property Look Good
      2. Cleaning It Up
        1. Annual or Seasonal Cleans
        2. Make-Ready Cleans
        3. Maid-Service Cleans
      3. Making It Safe
      4. Green Is the New Black
        1. Easy Ways to Go Green
        2. LEED Certification
        3. Getting an Energy Audit
      5. The Importance of Inspection Reports
      6. Furnishing Your Rental
        1. Accessories
        2. Kitchen Items
        3. Electronics
        4. Furniture
        5. Bathroom
        6. Bedroom
        7. Phone
      7. Property Manual
    3. 7 Property Management and Maintenance
      1. The Property Team
        1. Who’s Answering Phones?
        2. Assembling Your Team
        3. Vetting Potential Team Members
      2. Should You DIY?
      3. The Importance of Maintenance
      4. The Complaint Department
        1. Establishing the Rules
        2. Handling Tenant Complaints
        3. Sending Complaint Letters
      5. Emergency Preparedness
        1. Create a Plan
        2. Plan for Everything
    4. 8 Landlord Rights and Responsibilities
      1. The Implied Warranty of Habitability
      2. Your Rights as a Landlord
      3. You Can’t Do That!
      4. The Covenant of Quiet Enjoyment
        1. Written Permission
        2. Grandfather Clauses
      5. Understanding Tenant Rights
        1. Right to Entry Versus Right to Privacy
        2. Permission Denied?
        3. Respect Your Tenant’s Privacy
      6. Rent Control
  7. Part 3: You and Your Tenants
    1. 9 Finding the Right Renters
      1. Establishing Your Brand
      2. Marketing for Success
        1. Create a Website for Your Rental
        2. Smart Ad Placement and Search Strategies
        3. Craft Your Marketing Plan
        4. Make Your Property Stand Out
        5. Get Testimonials
        6. Track Your Success
      3. Write It Well
      4. Picture It
        1. Photography Pointers
        2. Virtual Video Tours
      5. Listing Your Rental
        1. Topic Sites
        2. craigslist
      6. Smart Social Media Strategies
        1. YouTube
        2. Facebook
        3. Twitter
        4. Pinterest
      7. Social Media Management
      8. Successful Property Tours
      9. Making the Most of Inquiries
    2. 10 More Renter Considerations
      1. Start with Good Communication
      2. The Application Process
      3. Reports and Checks
        1. Rental History Checks
        2. Credit Checks
        3. Background Checks
        4. Reference Checks
      4. Approvals and Denials
      5. Choosing a Tenant
      6. Inheriting Tenants
      7. Negotiating Rent Rates
      8. Avoiding Scams and Frauds
  8. Part 4: The Business Side of Rentals
    1. 11 Money Management
      1. All About Rent
        1. Collecting Rent
        2. Banking
        3. Imposing Late Fees
        4. Increasing Rent
      2. Security Deposit Basics
        1. What Can You Charge?
        2. Keeping or Returning It
        3. Can You Increase a Security Deposit?
        4. What About Interest?
      3. What Other Fees Can You Charge?
      4. The Collection Department
    2. 12 More Money Management
      1. All About Accounting
        1. Accountants
        2. Accounting Software
      2. Taxes
        1. Schedule E Deductions
        2. Depreciation
        3. Property Tax Assessments
    3. 13 Renter Arguments, Evictions, and Vacancies
      1. The Hatfields and the McCoys
        1. Tenant Complaints
        2. Landlord Complaints
      2. Housing and Building Code
        1. Code Complaints
        2. Retaliation Laws
        3. Courtroom Battles
        4. Tenant Versus Tenant
      3. Grounds for Eviction
        1. Nonpayment of Rent
        2. Lapse-of-Time
        3. Breach of Lease Terms or Statutory Duties
        4. Illegal Conduct or Serious Nuisance
      4. Building Your “Bouncer Team”
      5. The Eviction Process
        1. Notice to Quit
        2. Summons and Complaint
        3. Appearance in Court
        4. Answer to Complaint
        5. Trial
        6. Judgment and Execution
      6. Creating a Property Turnover Plan
    4. 14 The Importance of Insurance
      1. Yes, You Do Need Insurance
      2. Types of Insurance
        1. Homeowner’s Insurance
        2. Landlord’s Insurance
        3. Replacement-Cost Insurance
        4. Cash-Value Insurance
        5. Mortgage Insurance
        6. Title Insurance
        7. Liability Insurance
        8. Specific Loss Insurance
        9. Loss-of-Rent Insurance
        10. Renter’s Insurance
        11. Accidental Rental Damage Insurance
      3. The Insurance Process
        1. Deductibles
        2. Adjustments
        3. Payments
    5. 15 Building Your Business
      1. Owning Your Own Business
        1. Going Solo
        2. Working with a Partner
        3. Buying a Franchise
      2. Real Estate Brokerages
      3. Choosing a Target Market
      4. Creating Your Business Plan
        1. What Is Your Business?
        2. Who Is Working Your Business?
        3. Why Is Your Business Better?
        4. Where Will You Find Customers?
        5. How Much Money Will Your Business Need?
      5. Know Your Competition
      6. Establishing a Client Base
      7. Financing Options
      8. Necessary Licenses
      9. Insuring Your Business
      10. Setting Up and Running Your Office
      11. Stay Updated
        1. Publications
        2. Trade Organizations and Associations
        3. Chambers of Commerce
        4. Continuing Education and Conferences
    6. 16 Rules, Laws, and Fair Housing
      1. Discrimination Laws
        1. The Fair Housing Act
        2. Occupancy Standards
        3. Federal Law Exemptions
        4. State Laws
      2. Understanding Disabilities
        1. Reasonable Modifications
        2. Section 504 of the Rehabilitation Act of 1973
        3. Americans with Disabilities Act
        4. Addicts
      3. State and Local Laws
        1. Uniform Residential Landlord and Tenant Act
        2. Residential Lead-Based Paint Hazard Reduction Act
        3. Megan’s Law
      4. Terrorism
        1. Patriot Act
        2. Investigating Tenants
        3. Be Prepared
        4. Terrorism Insurance
      5. Penalties
    7. 17 Hiring a Property Manager
      1. Why Hire a Property Manager?
        1. More Time for You
        2. Current Market Knowledge
        3. Current Law Knowledge
        4. Tenant Connections and Knowledge
      2. Finding the Right Company
        1. A Note on Maintenance
        2. A Note on Accounting
        3. A Few More Questions to Ask
      3. What About a Resident Manager?
      4. Licensing
      5. Setting Expectations
  9. Appendixes
    1. A Glossary
    2. B Resources
      1. Residential Property Management Software
      2. National Real Estate Organizations
      3. Books
      4. Magazines and Other Publications
      5. Real Estate Educational Forums
      6. Real Estate Websites
      7. Additional Resources
    3. C Sample Documents
      1. Tenant Communication Forms
        1. Acceptance Letter
        2. Departure Confirmation
        3. Departure Notice
        4. Emergency Contact Numbers
        5. Key Distribution Record
        6. Maintenance Request
        7. Move-In/Move-Out Checklist
        8. Notice of Denial
        9. Notice of Returned Check
        10. Potential Renter Inquiry
        11. Reasonable Accommodation Request Form
        12. Tenant Emergency Procedures
        13. Warning Notice
      2. Leasing Documents
        1. Three-Day Pay Rent or Quit Notice
        2. Five-Day Demand Notice
        3. Deposit Itemized Deductions
        4. Deposit Receipt
        5. Eviction Notice
        6. Lease/Rental Agreement
        7. Lease Addition or Amendment
        8. Lease Renewal
        9. Lease Termination
        10. Letter of Responsibility
        11. Rental Rate Change Notice
        12. Permission to Enter Notice
        13. Pet Agreement
        14. Property Management Agreement
        15. Rental Application/Background and Credit Check Application
      3. Property Forms
        1. Appliance Tracking Sheet
        2. Cleaning Checklist
        3. Maintenance Checklist and Record
        4. Work Order
    4. Index
    5. About the Author