Minnesota Investment Real Estate

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I have not been posting much lately as I have been buried with multiple apartment turnovers.  As I mentioned previously, several years ago, I moved many of my lease end dates to May 31.  Subsequently this can be a busy time of year for me.
While I was helping my handyman on a overhaul that we are doing to one of my units (new carpet, paint (ceilings, walls, and trim), new doors, and every last maintenance issue), I thought about some maintenance tips and tricks that I use to make my life easier and make my investment properties more bullet proof.  Below is a list of ones that I do during an apartment turnover.

• I am not sure why, but I always find the door knobs in my units are loose when we do a turnover.  I bought a small tube of Loc-Tite”, which most mechanics use, that will almost glue the screw into the knob (do not buy the permanent product as you will never get the knob off!).
• The only locks in the entire unit are the deadbolts on the doors.  I do not like keyed knobs anywhere in the unit or on the front doors as it is just asking for someone to lock themselves out of their apartment or room.  I confirm we do not have any stray locking knobs.
• I always run drain cleaner down each drain to insure they are operating correctly.  I bought a product called “Thrift” at the plumbing supply store.  It is extra strong and used by most of the drain cleaning experts.
• If the toilet is not working correctly or is more than 5 years old, I replace it.  Yes, the parts only cost $8, but I don’t trust them as I had an $800 water bill on a single family house after my plumber just replaced the parts.  I could have bought 8 complete toilets that month for the cost of that water bill!
• I leave a box of cheap furnace filters during the turnover to help the tenants know to change the filter occasionally.
• Even if the tenants have never complained about mice, I put a few fresh mouse bait pouches in the basement and under the stove.  This insures we are ready if any of the critters gets into the building.
• Remember to replace batteries in the smoke detectors.

Most of these items are inexpensive, but they can save you taking a maintenance call later.  Find your small repair items and do them at the turnover.

First Story: I realized last week that I had not been inside one of my rental properties in about 14 months. This is despite the fact that I drive by it every week or so as it is near my parent’s new house. The building was built in 2006, these are the first tenants to live there, they have never called about anything, and their rent is always on time. Regardless, I did get a little anxious thinking about what condition this property could be in as they have an active 25 pound dog and 2 cats.

I called the tenant 24 hours in advance and told them I needed to do a walk through to check out the place and review the mechanicals. The next day I arrived and found the townhouse in perfect condition. I dare say that it looks as good now as the day they moved in 18 months ago. Thank you!

Second Story: I received a letter from the City of Minneapolis Rental Property Department, about 2 weeks ago, informing me of a rental inspection at one of my duplexes this Friday. Both units were renovated about 18 months ago and should be in good condition. Additionally, I speak to these tenants at least monthly and they rarely have any maintenance issues. I decided to schedule an inspection several days in advance to check things such as smoke detectors, fire extinguishers, and other safety items that I know the Minneapolis inspectors love to catch.

After changing batteries in the smoke detectors in unit #1, I headed up to the other unit to find that all the smoke detectors had been put in a drawer. After replacing all those units, the tenant mentioned a window on the porch that had a problem. The window was 100 years old and the sash had finally separated from the rest of the window. Consequently, it was pouring cold air into the unit. I pulled it out, brought it to the shop and re-glued and re-glazed everything. Good as new and I have a happy tenant to boot.

My advice: Now that the holidays are a distant memory, now is a good time to get back into your properties and check them out. Call it a mechanical inspection or what ever, but get in and see how the property looks. This will also give you a chance find those items that the tenants have not called about (or don’t want to call about). It is important for the health and safety of your tenants as well as the longevity of your property.

Have you always wanted to buy investment property, but never knew where to start? Don’t Wait! Get Started now.

Scott Ficek is a Minnesota Real Estate Agent with Keller Williams Integrity in Minneapolis and helps new and seasoned investors buy and own Investment Property. He owns and manages almost 30 investment property units from single family to multi-family. Find his website at www.minnesotainvestmentrealestate.com or receive his blog via your RSS Feed or in your Email.

Tenants and Toilets are the two key complaints that most landlords talk about. I believe that having a dependable, thorough, and honest handyman that has good workmanship is an absolute must whether you own 2 or 20 investment properties.

1. Your handyman should be able to fix most items in your properties. Maybe just as important, he should admit when a project is not his specialty and should be outsourced. Build trust where you can rely on his judgement on what needs to be fixed and how it should get done.
2. Find a handyman that lives near your properties. You will be very thankful for this when your tenant calls at 7:00 at night about a plugged toilet or a furnace not running or any other number of issues that require immediate response. It is great to be able to simply call your handyman and ask him to swing over and take care of the problem.
3. Give him enough work that he sees you as his primary customer. This should keep him wanting to please you by taking those 7:00 pm calls to unplug a toilet! Conversely, unless you can sustain him 100% indefinitely, make sure that he does not rely on your work alone as when you slow down, he will be concerned about putting food on the table.
4. If your volume warrants it, negotiate a reduced per hour rate. Discuss eliminating trip and overtime charges.
5. When you go on vacation, consider paying your handyman to be your vacation buddy. You should decide if you will give the handyman the keys to the properties. When I go on vacation, I like to keep all the keys in my garage. In an event that he absolutely needs keys, I will then tell him where they are and give him the combo to my garage door.
6. Find your handyman through referrals with your real estate agent, check the hardware store bulletin boards, and scan Craig’s (or Angie’s) List.

Having a consistent handyman can be a crucial addition to your investment property team. He should free you up from having to do all your maintenance and potentially save you money instead of having to call a trade person (ie: plumber, carpenter) to fix something small.

Scott Ficek is a Realtor with Keller Williams Integrity in Minneapolis and helps new and seasoned investors buy and own investment property in Minnesota. He owns and manages almost 30 investment property units from single family to multi-family. Find his website at www.minnesotainvestmentrealestate.com or receive his blog via your RSS Feed or in your Email.

Who mows the grass and shovels the snow at your investment properties? Maybe you do. Eventually you may want to ask one of your tenants to take care of the work. Here are some tips on how to make this a winning situation for you and your tenant:

• Find a tenant that takes pride in where they live. Someone that is often just making their rent payment is a good candidate. They will appreciate the extra money.
• Do NOT reduce their rent. Keep the rent at the standard amount and instead, pay them by check for the work they do. This allows you to stop paying them if they stop doing the work. If you discount the rent and they stop doing the work, you would need to have them sign an updated lease for the non-discounted amount which may be impossible to do (resulting in you getting less rent than expected and needing to find a new caretaker-or do it yourself). The only exception is for single family houses where yard maintenance (grass & snow) are part of the original rent amount.
• I have seen some landlords pay as much as $100 per month for simply mowing the grass and shoveling, both of which take less than 2 hours per month. I normally pay the caretaker $25-30 per month all year. Again, I do not pay anything at single family houses.
• You should provide all tools (shovel & mower), gas, and salt for the tenants. This is only fair considering what you are paying them.
• Never give your caretaker a set of keys to the apartments unless they perform maintenance duties and/or leasing as you can open yourself up to liability if they steal or break something or assault someone. If your caretaker has access to apartment keys, you should make sure you have run full employment-type screening on them (including background checks). Consider having them bonded for additional liability protection.
• You may need to provide your tenant a 1099-MISC form as this caretaker work could be considered income. Check with your accountant.

Finding a caretaker can lower your time requirements at your properties. Done correctly it can be a great situation for you, your tenant, and your building.

Scott Ficek is a Realtor with Keller Williams Integrity in Minneapolis and helps new and seasoned investors buy and own investment property in Minnesota. He owns and manages almost 30 investment property units from single family to multi-family. Find his website at www.minnesotainvestmentrealestate.com or receive his blog via your RSS Feed or in your Email.

When is the last time you examined your water bill?  Are you sure it is correct?  How much water should an apartment building, duplex, or 4-plex be using?  Allowing toilets to run on and faucets to drip can add $50, $100, even $400 per month in extra expenses.  I even had an $800 water bill at a single family house because the tenant never told me the toilet starting running all the time. 

Excuse the pun, but that was just money down the drain.  Never to be recovered.  Not put back into the property. 

A rise in the water bill can be triggered by several items:

• Dripping faucets
• Running Toilets
• Malfunctioning washing machines
• Outside spickets that are not turned off
• Even more people living in the apartment than you expected (and may be on the lease)
• I even had one police detective tell me that illicit drug manufacturing in a home can use large amounts of water!

Call you municipality and ask them how many gallons or units should be used per month per person.  Do the calculation to see how close you are.  If your water usuage is outside the norm, stop by at your apartment immediately and hunt around for the offending appliance. 

Additionally, don’t assume the water usuage you have been seeing on your bill for years is the lowest it can be.  You may be sitting on some cost saving opportunities.  Replacing shower heads and toilets older than 10 years can dramatically cut your water bill.  Many of the older toilets used 3.5 gallons per flush compared to many today that use 1 gallon!  These improvements can pay for themselves within 1 year as well as protect you against the $800 water bill (since the unit is brand new).

Read your water bill the next time it comes in the mail and see if you can stop those pennies, dimes and even dollars from going down the drain.

Scott Ficek is a Realtor with Keller Williams Integrity in Minneapolis and helps new and seasoned investors buy and own investment real estate. He owns and manages almost 30 investment property units from single family to multi-family. Find his website at www.minnesotainvestmentrealestate.com or get his blog via your RSS Feed or in your Email.

That is easy—911…but who do you call when you are on the beach in Acapulco and the water heater at your investment property dies?  Or more importantly, who do your tenants call when the water heater dies and you are out of cell phone range?  Do you have a plan and/or people in place so you can take vacation and confidently leave the properties alone?

With some simple preparations, you can easily slip out of town and relax knowing your investment properties are in good hands. 

Preparation prior to vacation:

• Have all your service & emergency calls routed through the same phone number.  You can then change the voice-mail message when you are out of cell phone coverage or just want to “unplug”.
• Consider mounting permanent lock-boxes to the door frames of each unit.  Alternatively, you can put an extra set of keys for an entire building into a locked store room or mechanical room and then put a key for just that room into a lock-box at the building.
• Compile a list of all contractors and handymen that you use on a regular basis.  Make sure they are listed in your cell phone. 
• Identify a “vacation buddy” who will take calls and manage any emergencies that may arise when you are away.  This may be your caretaker or your handyman, but it may be a parent, friend, or relative.  Make sure they understand your business.  Take them on a tour of your properties (print out a map with addresses!). 
• If you don’t have a caretaker at a building, at least identify a tenant that you trust to give you an honest assessment of a situation if they are the only eyes on site.

When you are away on vacation (where you can’t receive cell phone calls):

• Either change your greeting on your phone to give the callers the name and number of who to call for maintenance, emergency, and leasing questions or have your vacation buddy check your voice-mail periodically throughout the day.
• Be firm with your tenants and/or vacation buddy that any non-urgent requests must simply wait until you return.
• Print out a list of your contractors and handymen that you use as well as your tenant’s contact information and leave it with your vacation buddy.  Make sure your vacation buddy feels comfortable relying on the expertise and advice of your contractors.
• Leave your keys with your vacation buddy and/or make sure s/he has the combinations to your lock-boxes at the properties.
• Give your vacation buddy funds (a credit card) to pay for emergency items while you are gone.
• If you just can’t stand to unplug for a long period of time, pre-arrange a call date and time with your vacation buddy to check in.
• Give your vacation buddy your travel schedule and your emergency contact phone numbers (if you building really does burn down, you would want to know immediately).
• Take copies of your tenant phone list and contractor/handyman phone list with you so in an emergency you could help your vacation buddy with who to call or make calls yourself.

These preparations are good practice whether you are going to grandma’s house 100 miles away or to Acapulco for an extended vacation.  They will keep your assets protected, your tenants happy, and your vacation more pleasant.