A guest post by Brian Davis, Ezlandlordforms.com, Moorestown, NJ

Building a strong relationship with a new tenant and protecting your real estate investment is of paramount importance when crafting a lease agreement.  There are a multitude of considerations at this juncture that are essential to understand.  Brian Davis, Vice President of EzlandlordForms.com, is a seasoned landlord and top expert on landlord-tenant relationships.  Here he offers his top tips for new landlords as a helpful tool for navigating lease creation and the ongoing considerations of managing a rental property.

1. Understand the Fair Housing Act and how it applies to your rental.  When advertising for a new tenant, it is critical that landlords and property managers understand and comply with the Fair Housing Act. The Fair Housing Act prohibits landlords from using any of the following criteria when evaluating potential tenants: race, color, national heritage, religion, gender, disability, and familial status. While that may sound simple on the surface, consider that stating in a rental listing “perfect for a single professional” is a violation of the Act (bias against familial status). Advertising only in your church’s newsletter discriminates by religion. What landlords can and should use to evaluate potential tenants is financial data, credit histories, and other background data.

2. Know your tenant by thoroughly screening each prospective renter to avoid problems down the road.  This can be accomplished by a few simple steps.  First, conduct a professional credit check to learn an applicant’s credit history and if they have been fiscally responsible in the past.  Bad credit can serve as a red flag and you may wish to avoid such tenants.

Next, ask for references from past landlords.  However, be on notice that while references from prior landlords are worth a quick phone call, they aren’t particularly telling, because tenants can give fake names and numbers, and even if they don’t, the old landlord may well be painting a rosy picture of the tenant in order to get rid of them.

What a landlord should verify are the rental applicants’ credit, employment/income (and historical stability), criminal background, and eviction history. When landlords run these checks, not only can they determine the best rental applicant, but the landlord can defend against any discrimination lawsuits by producing hard data used to choose one rental applicant over another.

3. Build an airtight lease agreement by knowing the laws that apply in your state through a state-specific lease.  Each state has slightly different laws that impact a landlord-tenant relationship.  Accordingly, use a state-specific lease instead of a general lease to best protect your real estate investment.  For example, California requires all lease agreements to include clauses mandated by Megan’s Law, and every state has different limits on security deposits, late fees, etc.

While not an exhaustive list, other elements a lease agreement should clearly define include: Who is responsible for paying the utilities, which appliances are included and who is responsible for maintaining them, whether the lease auto-renews and for what term, details surrounding fees and deposits, and whether is there an option to purchase – and if so what are the terms?

4. Understand the eviction process.  Although many of us don’t wish to think about worse case scenarios, it is important to become familiar with the eviction process and be ready to start the process immediately when a tenant violates the lease.  While the specific documents required are different in each state, all states involve the same general eviction process. The landlord or property manager must serve the defaulting tenant with a particular notice, wait a specified period of time, file in court, attend a court hearing, schedule a date for the actual eviction, and so on, and landlords are well advised to understand this process before actually having to go through it, because it is extremely expensive and takes far longer than most landlords anticipate.

5. Devise a Moving In and Moving Out procedure and be sure it is clearly defined.  One helpful tool is a comprehensive walk-through checklist.  This document will be used for the landlord/manager to walk through the rental unit with the tenant and document the condition of the unit upon move-in and move-out.

6. Offer performance incentives: While most lease agreements include a late fee, landlords can further incentivize timely rent by offering a reward for early rent payment, renewing for a longer term period, and/or any other behavior you want to encourage. Rewards can range from the simple, such as rent discounts, to the complex, such as point systems where tenants earn points and exchange them for rebates, gift cards, updates to the rental unit, etc.

7. Establish a relationship with at least two good contractors. Landlords and property managers need at the very least a licensed contractor who can handle large jobs, and an inexpensive handyman who can affordably fix minor issues. Don’t wait until your tenants’ heating system stops working in January, or the roof collapses, as the time lost in trying to find a contractor by that time will cost real money. Instead form these relationships before you actually need them, and then you will simply be able to make a phone call and have the problem resolved immediately.

8.Stay capitalized. One of the most serious problems small landlords face is lack of cash, as being a landlord involves unexpected expenses. These range from tenants suddenly ceasing to pay their rent, to unexpected repairs, to lawsuits, but the only predictable aspect to these unexpected expenses is that they will happen, and with some frequency. Set aside a hefty amount of cash specifically for rental expenses, and resist the temptation to use it for anything else.

By Ben Holubecki, STML Realty Group, Glen Ellyn, IL

Transfer policies are often a detail overlooked by landlords and property owners who own/manage multi-unit properties. A tenant requesting a move from one unit to another presents challenges and can add unnecessary and unexpected costs for property owners. Ignoring these requests or not addressing them properly can open landlords up to potential resentment from tenants and even legal liabilities if not properly documented.
There are a lot of reasons why a tenant might request a transfer to another unit within the same property and there are positive and negative impacts resulting from this type of request. The most common reasons for these requests in my experience are:

- Problems or issues with current neighbors
- Maintenance issues within their current unit which they feel were not or will not be addressed
- Lack of upgrades due to extended tenancy (newly remodeled units are obviously more desirable)
- Preference regarding location within the property (different floor, closer to parking, amenities)
- Moving from 1 unit type to another such as moving from a 1 bedroom apartment to a 2 bedroom

Regardless of the tenant’s reason for the transfer request, there are both positive and negatives that you should consider.

The positive:
- Your tenant obviously likes the property enough to want to stay
- You have a history with this tenant so you know what to expect regarding care for the property and rental payments. No surprises. That is always a positive.
- You have the opportunity to make a tenant happy who otherwise may be dissatisfied with their current situation.
- There may be an opportunity to raise rent and extend the lease term guaranteeing more income from that tenant.

The negative:
- You have just incurred the expenses necessary to prepare a unit for rent which will now produce little to no additional monthly cash flow as you will lose the rent from the renter’s original unit.
- There is now likely additional expenses necessary to prepare the old unit for a new tenant.
- This old unit may be less desirable that the one the tenant is moving to due to location, layout, lack of upgrades, etc.
- This existing tenant may be a risk. They could be just making the current rent and may be stretching themselves to pay a higher price for a larger space. They may be dirty. It is one thing to leave them in their existing dirty unit. It is another to let them trash your newly cleaned and carpeted apartment.
- You may have this new unit committed to another applicant.

In almost all cases we have found that the negative impacts outweigh the positive financially. The exception is in properties with high vacancy or those being turned over. In those cases we can’t afford to lose any good tenants and it is in our best interest to allow any reasonable move request. The issue comes when dealing with the high occupancy or fully occupied property. As soon as we have a tenant vacate we expect some level of cost and effort to prepare the unit for a new renter. However, that cost will be offset by the income generated by a new tenant. When we are forced to move an existing tenant we double our preparation cost and generally double our vacancy time. This is a bad business model which many owners/landlords will avoid by implementing a strict no transfer policy. Tenants must complete their full lease term and can only transfer by applying for a new unit at the end of the existing lease. This is likely the strongest and most profitable stance to take if you have no problem with vacancy whatsoever. However, you will lose good tenants who will resent the fact that their “reasonable request” was not considered prior to lease expiration. Everyone who does not subscribe to this hard stance operates with some level of flexibility regarding tenant requests to transfer.

I am not recommending one policy over any other as there are many factors and variables that should dictate your position on the matter. However, no matter what policy you subscribe to it is in a landlord’s best interest to put this policy in writing and make it part of your lease. I have spoken to several landlords who have responded to formal fair housing complaints arising from this issue and every one of them have told me that the first question that they are asked is, “What is your transfer policy and is it in writing?” If a current tenant has asked to be moved to another vacant apartment in the same building and you ignore this request to place a new applicant there is nothing to stop a tenant from claiming that they were unfairly rejected or discriminated against during your selection process. Those complaints can result in fines that can make your head spin if things don’t go your way. An even bigger issue is the precedent that is set. If you allow willy-nilly transfers to a few tenants then every tenant in the property will expect the same flexibility when they make a request. This could be a crushing expense over time.

No matter what your policy, as a landlord of a multi-unit property it is best to determine a very clear policy by which you will operate and allow someone to move within a property. Once your idea is in place it must be put into writing. All of the possible variables need to be included such as when these moves are allowed (anytime, only the last 90 days of the lease, never), when will they be rejected and why (late payments, damage to property, etc), if you will maintain a waiting list for units not currently available, handling of security deposits, and any other important factors. Having a clear and concise policy virtually eliminates any variables and can help minimize your liability stemming from a possible complaint.

Here is a sample policy that a client of ours has utilized for some time. It is thorough and he has not had a single issue since implementing it two years ago. This was a constant issue prior to his addition of this clause to his leases.

TENANT TRANSFERS. Tenants may request transfer to another unit within the property during the term of their tenancy. Unit transfers will only be considered within 60 days of the expiration date of the current tenant lease. Each request will be considered based upon unit availability, rental payment history, positive (complaint-free) tenant record, and current occupancy plans (pending move-ins, deposits held, repair plans, etc) at the time of the request. Lessor will make a tenant transfer determination based upon any or all of these factors. Rental pricing for the Lessee’s previous (current) unit will have no bearing upon the rental amount charged for the new (transfer to) unit. Lessor has sole discretion to set rental prices as they see fit. Lessee will be required to sign a mutual release from the current lease (if one is in effect) and sign a lease for the new unit with a minimum term of 1 year. Transfer to another unit does not relieve the Lessee of their responsibility regarding security deposit within their original unit. Upon approval of the move, Lessee will be assessed a damage bill for the current unit and a charge will be entered into the tenant ledger to reduce the security deposit amount held by the Lessor to offset the cost of repairs. Upon signing the new lease, Lessee will provide payment in full for any security deposit shortfall required per the new unit lease. Lessor has sole discretion to set security deposit requirements as they see fit. Lessor may relocate tenants based upon need due to damages, repairs, or remodeling from time to time. These moves will be considered necessary and temporary relocations and will not be considered “tenant transfers” and do not fall under these guidelines. Necessary and temporary relocations will take precedence over any tenant transfer request and Lessee agrees to hold Lessor harmless in the event that a necessary relocation supersedes a tenant transfer request or otherwise makes a tenant transfer impossible. Lessor reserves the right to amend this policy at any time upon written notice to Lessee.

By Geoff Roberts, Buildium, Boston, MA

Whenever I’m asked what I do for a living, my go-to response is that “I work in marketing and public relations for a software company.” That’s a sufficient reply for most social situations, but on occasion I’m asked more specifically about my job responsibilities. Inevitably I’m stopped as soon as I mention “search engine optimization” or “SEO.” While this is a small part of what I do, I’ve found that it fascinates people – they tend to look at it as something of an enigma. “I’ve never understood search engine results” or “Google makes it all up anyways” are common responses, but the probing questions regarding SEO never stop there. Regardless of the industry you are in, search engine results are likely playing an increasingly important role in your company’s ability to be found by prospective customers and others interested in the products/services your business offers. As I’ve been receiving an increasing number of emails regarding SEO from Buildium customers, I figured I’d start by laying out some of the basic tried and true practices that can help your company rank more highly in search results.

What exactly is SEO?

According to Wikipedia, search engine optimization is the “process of improving the visibility of a website or web page in search engines via the ‘natural’ or unpaid search results.” In plain English, when you go to Google and run a search for anything, say “Boston Property Management,” it’s the process of improving how close to the top of the search results your company appears.

Where do I start?

Now that we’ve cleared up exactly what we are talking about, I’m going to lay out a 3-step guide as to where you should start. SEO is a hugely complex subject, but these basic concepts should get you started off on the right foot.

Step 1 – Identify relevant keywords

Before you do anything else, you must identify the “keywords” that people are searching for in order to find businesses like your own. A good way to do this is to think about what you would search for if you were looking for your business. Say that you run Joe’s Property Management, a company located in Boston, MA. The keyword “property management” is likely too broad of a keyword, although it applies to your business. “Joe’s Property Management” would likely be a better keyword, although it would only be effective to the extent that people had already heard about your company and were familiar with “Joe’s.” A better option might be “Boston Property Management.” By bringing location into the keyword you’re letting potential tenants and property owners know that you offer property management services specific to the Boston area. If everybody that was looking for property management services in Boston came across your company first in the search results, that could be valuable for your business, no? Likewise if you manage only residential properties adding the qualifier “residential” to “property management” might be a good way to drive relevant traffic to your site.

If you are new to SEO I’d focus on identifying one or two highly relevant keywords to start. You can then use Google’s Keyword Tool to search for how often each of these keywords is searched for on a monthly basis and how much “competition” there is around a particular keyword. Keywords with low competition are easier to rank highly for, and the more monthly searches a keyword has the more opportunities your business has to be discovered.

Step 2 – Set Your Title Tags

On-page SEO refers to making technical changes to the back-end of your website that make it easier Google or any other search engine to identify what your site is all about. There are many different on-page aspects that you can change, but in my experience changing the “title tags” has the greatest impact on search results. A title tag is the text that appears in the tab at the top of your Internet browser whenever you open a website. Above you’ll see the title tag for amazon.com – “Amazon.com: Online Shopping for…” As a general rule, the closer to the beginning of the title tag you put your keywords the better. You’ll notice that immediately following the words “Amazon.com” are the words “Online Shopping” – keywords very important to Amazon. If you don’t have a technical skill set, you’ll need your web master or whoever manages your website to change the title tags for you. But adding keywords relevant to your business into your title tags will help you rank more highly for those terms.

Step 3 – Link Building

I think it’s fair to say that link building is the lifeblood of SEO – nothing will have a more dramatic impact on how highly you are able to rank for the keywords you have targeted. Search engines look at how many inbound links are directed at your website – an inbound link is a link on another website that directs visitors to your website. By putting your keywords in the “anchor text” of the links back to your site, you help yourself rank higher for those keywords. For example, if you want to rank highly for the keyword “Boston Property Management” having links on other sites that look like this: Boston Property Management; will help you rank more highly for that keyword. To start link building, reach out to current clients, associations, or anyone else that is interested in your business and has a website to see if they’d like to swap links with you. You offer to link to there site and vice versa – it’s a mutually beneficial process. That said, link building is time consuming and often frustrating. You should accept this and link building should become an ongoing part of your SEO strategy. One final note – link building is very much a quality over quantity activity. Links from highly “authoritative” websites – sites that have a high volume of visitors and are considered by search engines to be credible sites – are much more valuable and will help you rank highly in search results more quickly. For example, a inbound link from Amazon.com would be much more beneficial than 10 links from small online shopping sites. It will also be much harder to convince Amazon.com to link to your site, but that’s the nature of the beast. Website “authority” is often measured using Google’s PageRank.

Hopefully SEO is beginning to look a little less scary and you have an idea of how your property management company should begin to rank more highly for keywords vital to your business. If you want to jump into the deep end and take SEO into your own hands rather than hiring somebody to handle it for you, there a number of SEO tools available to you. A useful paid tool is SEOmoz, and a great free option is Google’s Webmaster tools.

By Jo-Anne Oliveri, ireviloution intelligence, Brisbane, Australia

I see too many property management businesses either fail completely or forever fail to achieve their targets for many and varying reasons.

It’s important, just like in any business, to understand and know your market. In order to create your business plan and targets you must know the market size, potential, averages, statistics and demographics. In this particular blog I’ll focus on the critical role market potential and averages play in the success of your business.

Mistakes continue to be made in the property management industry because business owners focus on numbers and not income. There are many critical factors that can make or break the success and profitability of an agency. By understanding critical factors you should then understand that by focusing on the number of properties under management, rather than the income, you are creating a ‘Frankenstein’ for yourself and your team, not to mention disastrous consumer relationships.

To put it simply by focusing on properties under management you are focusing on quantity only. By measuring targets on income you are focusing on quality. It’s a classic “quality versus quantity” dilemma,  and quality always beats quantity. A quality agent attracts quality teams, which tend to attract quality property owners and their quality properties, who in turn attract quality tenants. Next thing you know you have yourself a quality business and a quality brand. QUALITY PLUS!

Always remember – when you are tempted to focus on numbers of properties under management, when you think your business is growing too slowly, bring your focus back to your market and targets. Don’t allow yourself to become distracted or impatient.

Best of all, it’s far easier to build a business focused on quality than quantity. Yet, for some reason, the industry keeps reverting back to numbers. Stop it and stop it now. Be patient and as I mentioned in the outset – know your market… intimately!

If you continue to focus on numbers and entice your team with incentives based on the number of units under management you are more than likely setting yourself up business denigration, brand degradation and team disintegration, not to mention self detonation.

You can easily achieve 100 units under management within a few short months if that’s your target, but how, why and where did you pull that figure from? Is it a magical number? Is it because you have heard that 100 is a good number to have before you start investing in more resources? Will this number somehow produce profit? More than likely, you have no idea why 100 seems like a good number to have in order to start producing profit.

By focusing on a number and continually asking the team how many units are under management, you are seeing the number but probably wondering why there is still no profit. You will more than likely get excited and be paying the team some handsome monies for getting closer and closer to the magic 100 properties under management only to find that you are now spending more and more dollars on the property management division and only receiving more and more headaches with a business that seems to be going backwards and forwards all the time. This is a classic business in the front door with more business walking out the back door scenario.

However, if you focus on quality by knowing your market you will understand that your market achieves an average weekly rent of say $300. You will also understand, through statistical data, that on average there are 300 units leased every month in your area. Your target will then be to add 10 new units per month to your portfolio making a dollar target of $3000 in additional rent per month (not taking into consideration your fees and charges for service). This target must be achieved each month by the team responsible for developing new business. Anything that is achieved above that target can be paid to the team (individual) as an incentive. However, they now have a minimal target they must achieve that is both realistic and achievable. You as a business owner can also base your targets and budgets upon actuality, making business planning and brand protection much more simple and realistic.

Do you know your “real” market potential?