Scott Taylor

I was reading some Tweets the other day on the landlord forum. One Tweet in particular stood out. Essentially, the individual, who was a tenant, had just found out that the landlord was charging him for the cost of heat. His Tweet asked, among other superlatives, “Do you know how expensive heat is?”

I almost fell off my chair laughing. Yes, I know how expensive heat is. That’s why I never pay for utilities in my rentals. It is that simple. I never invest in a property that does not have separate utility meters for each unit. Every tenant needs to be responsible for his or her own utility usage. So many property owners come to me with the idea that they need to pay the water. "I have such a beautiful yard,” an owner will say. “If I pay the water, the tenant is more likely to water it and keep it nice."

That is a fallacy. The tenant is no more likely to care for your landscape no matter who is paying the water bill. However, the tenant is more likely to take long showers, and not report a running toilet or a leaky faucet. Imagine if the tenant started a laundry washing service to make additional income. They do not have to pay the water bill, so why would they care? If possible, avoid paying for your tenant’s electric, water, sewer, trash, gas, propane, heating oil, or any other utility charge.

The only exception to this might be when one of those services is included as part of your HOA dues. For example, some HOAs include trash or water service as part of the dues. Only under those exact circumstances should you agree to pay for a utility.

Finally, do not forget to cancel any utilities that are in your name effective with the starting date of the lease. Many landlords fail to remember this simple procedure and end up paying for the tenant's utilities for a month or more. Then the landlord wants to be reimbursed. A battle will inevitably ensue over who owes what to whom. Avoid this battle altogether and schedule the cancellation calls on your calendar.

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Scott Taylor is the general manager and co-owner of SCV Leasing in Santa Clarita, California. He is also the author of the forthcoming book The 15-Minute Landlord to be published by Amazon this spring.

SCV Leasing serves Valencia, Stevenson Ranch, Newhall, Santa Clarita, Saugus, Canyon Country, Fair Oaks Ranch, Castaic, Sand Canyon, and Westridge with homes for rent, condos for rent, and property management services. SCV Leasing’s unsurpassed marketing plan puts renters in properties fast. Mr. Taylor can be reached at scott@scvleasing.com.

Three important considerations for your next rental property are location, condition, and upgrades. Rental property is not immune to the location, location, location mantra of real estate. In fact, it may be more important with your rental. For example, you may want to avoid buying a rental on, or backing to, a busy street. When the tenant goes into the backyard or opens their windows at night, they do not want to hear the roar of traffic.

Something else that is often overlooked with investment properties is future maintenance. If the exterior is brick or stucco, that might require less long-term care than wood siding. If the roof is tile, or a newer asphalt shingle, those may last longer and require less maintenance than an older asphalt or wood shingle roof. Copper pipes are less likely to cause plumbing issues than are galvanized pipes.

Finally, consider upgrades when comparing properties. Tenants love fresh paint, remodeled kitchens, and remodeled baths; so check out the potential competition in an area like new housing tracts, condominiums, and apartments. Newer structures have finishes that are more modern. Thus, the tile in your rental's kitchen may be serviceable, but it is going to look old when compared to the granite in the kitchen in the competition's rental across town. I am not suggesting that you replace your tile with granite, but if you can buy a rental property that already has more updates than less, then go for that.

A list of items you might like to have in your rental, in a perfect world, might include: recreational vehicle parking, neutral paint such as whites and beiges, tile floors since tile does not hold pet odors, and mirrored wardrobe doors because the make rooms look bigger.

You are not going to find the perfect rental property. However, if I were comparing two similar priced rental properties in the same neighborhood, I would try to save some money and choose the one with more updates and newer neutral paint. The updated and painted property is going to rent quicker and take less of my time and money to get the property rent ready.

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Scott Taylor is the general manager and co-owner of SCV Leasing in Santa Clarita, California. He is also the author of the forthcoming book The 15-Minute Landlord to be published by Amazon this spring.

SCV Leasing serves Valencia, Stevenson Ranch, Newhall, Santa Clarita, Saugus, Canyon Country, Fair Oaks Ranch, Castaic, Sand Canyon, and Westridge with homes for rent, condos for rent, and property management services. SCV Leasing’s unsurpassed marketing plan puts renters in properties fast. Mr. Taylor can be reached at scott@scvleasing.com.

Just got finished with our team meeting. I noticed one of our rental properties, which has been listed for a little over seven days, received very little interest over the last week. When I enquired further, I found out that the price set on the property was $200 over market. “How did that happen?” I demanded.

“The owner wanted to try for more money,” was the response from my agent. “In fact, the owner wanted to list it $500 over market, but I talked her down.”

This situation is not unusual for first time landlords. They are convinced that we are going to lowball the price in order to get the unit rented out quicker.

Just like real estate sales, rental properties move when they are priced at market and not above market. Here are four things that you as the property owner ought to consider.

1. We rent our dozens of properties a month and you do not. Who do you think knows more about the current market?
2. We told you how much to list the home for before you signed with us; thus, there is no way to lowball the rent. You knew what we recommended up front.
3. Property managers are paid a percentage of the lease. The higher the rent the more money I make. Do you really think I am going to cut my own profits?
4. Renting a property quicker puts more money in your pocket. However long you ignore my professional advice is directly proportional to the amount of money you will lose.

Let the experts do their job. The sooner you do, the sooner your home is rented, the sooner you are cashing checks.

I sat down with my investment advisor the other day. He was trying to convince me to put more money into my 401K. “After all,” he insisted, “the market returns, on average, 10% a year.”

I will capitulate, for argument’s sake, that the market does return 10% per year. But then inflation, even government stated inflation, takes out at least 3% of that. Now I’m making 7%.

Do you think inflation is 3%? I don’t. I think it’s more like 6%, and if that were true, then my return on investment would be closer to 4%, and then I have to subtract my investment advisor’s fees from that. In the end, I am making a whopping 3% return on my money.

Now let’s look at rental real estate. I have a mortgage on one my rentals that is $500 fixed for thirty years. The current rent is $750. In the next ten years, is that rent more likely to go up or down? Up I would say. Let’s say conservatively the rent goes from $750 to $1,250 in the next ten years.

Did that rent go up because I made the property better? No. It went up because of inflation. In ten years, salaries will be higher than today, so the cost of things will naturally increase in order to capture those dollars. And one of those “things” that will increase is my tenant’s rent.

Now I’m making $1,250 a month and my payment is still $500. More impressively, I put down 10%, the bank took the risk of the other 90%, and my tenant paid the mortgage off for me. Find a 401K that will do that!

The ability to quickly rent out a home is part price, part condition, and part marketing. Today, I want to focus on marketing. Specifically, I want to focus on the Multiple Listing Service (MLS).

In most of the country the MLS is the go to source for marketing a property for rent. However, in my market of Santa Clarita, California, there seems to be a small hesitation in the property owner’s mind as to the benefits of the MLS. Here are my top five reasons for using he MLS.

1. The MLS feeds Realtor.com, and Realtor.com in turn syndicates this information to many other top websites. If you are not in the MLS, you are missing massive exposure.
2. There are agents who are working with clients who may need to rent for a while. These agents only have one option - the MLS. If you are not on the MLS, they cannot find your rental.
3. It is the standard of industry. Why? Because it works. In our experience, homes in the MLS are rented two weeks quicker than those not in the MLS.
4. The cost to be in the MLS is only about eight days rent. If the home rents fourteen days quicker, you just made six days extra rent by being in the MLS.
5. You would never buy or sell a home that was not in the MLS. Treat your investment property with the same care and consideration. If it is not in the MLS, it is not on the market.

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Scott Taylor is the principal property manager and co-owner of SCV Leasing in Santa Clarita, California. SCV Leasing serves Valencia, Stevenson Ranch, Newhall, Santa Clarita, Saugus, Canyon Country, Fair Oaks Ranch, Castaic, Sand Canyon, and Westridge with homes for rent, condos for rent, and property management services.

His experience as a rental property owner and as a property manager makes him the best choice for managing your rental. SCV Leasing's unsurpassed marketing plan puts renters in properties fast. Mr. Taylor can be reached at scott@scvleasing.com.