What Options Do I Have If My Tenant is Breaking a Lease Agreement?

What Options Do I Have If My Tenant is Breaking a Lease Agreement?

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Lease agreements are invaluable legal contracts that allow both the tenant and the property owner to abide by the rules of the tenancy. It’s a form of assurance that the tenant will pay rent until the expiry of the lease and that the landlord won’t raise the rent.

But sometimes tenants don’t hold part of their bargain. A new job, marital issues, new house, and other reasons can force tenants to break lease agreements. Whenever this happens, it is important to know how you can handle the situation to avoid losses.

As a property owner, it is crucial to know what it means when renters breach tenancy agreements. Unless landlords violate the terms of the contract, a tenant is obligated to the terms of an early termination clause.

Still, under some circumstances, there are valid reasons that allow renters to break a lease. In effect, you can either be legally bound to release tenants without any penalties or be in a legal position to seek compensation. Here are some actionable tasks you can do to prevent or handle a broken lease agreement.

Consider A Lease Termination Clause As A Landlord

Including a lease termination clause in the tenancy agreement is the surest way of mitigating financial costs associated with tenants breaking leases. Such a provision would explain and provide a guideline regarding what should be done when renters terminate contracts early. The clause allows renters to give an early notice; this is typically 30-60 days before the intended day of moving out.

Lease termination for landlords is necessary as it gives you a chance to find new tenants while the departing tenant pays for rent. However, most states, including Utah, require landlords to actively search for new occupants to avoid overburdening the current lessee.

The early termination clause allows you to legally bind the tenant to the terms of breaking a lease. You’ll clearly outline the consequences of breaking the lease before the expiry of the term.

Within this clause, you can introduce a buy-out clause that allows the tenant or you to break the lease. In this case, the individual breaking the lease pays a penalty fee, which is equivalent to no more than two month’s rent – as required by the law. If you go with this option, sometimes it ends up being a costly choice if you can’t find a new tenant quickly.

Typically, you have three options as a landlord when a tenant breaks the lease:

  • Subletting – this means allowing the current lessee to sublet the property to another person. When this happens, ensure that the new tenant qualifies as a good tenant. Also, inform the previous renter that the security deposit won’t be available until the end of the original lease.
  • Re-Renting – the law requires you to advertise your property as vacant as soon as you receive a notice from the tenant. You can shift marketing costs to the tenant provided that you have clearly indicated that provision in the early termination clause.
  • The third option is letting the tenant pay for rent balance for the remaining months. This can work if there are a few months (less than 3 months) to the expiry of the lease. Note that the law requires you to mitigate damages when renters break lease agreements, so deliberately leaving the property idle is downright illegal.

 

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Demand for an Early Notice

Regardless of the reason that motivates your tenant to move out before the end of the lease term, you can include in the lease agreement the need to provide an early notice. You can give anywhere between 30 to 60 days depending on what works for you.

Can Tenants Break The Lease?

There are a few situations where the tenant can legally break a lease agreement. In Utah, you cannot subject your tenant to the buy-out or early termination clause if:

  • He/she is an active military duty
  • He/she is a victim of domestic violence
  • Your rental unit is considered inhabitable. Ensure that you meet Salt Lake City area health and safety codes.
  • You harass or violate your tenant’s privacy. You are required to give a 24-hour notice before entering the property. Also, you cannot change locks, tamper with utilities, remove doors/windows, or do anything that violates the tenant’s rights.

When Breaking a Lease is Unjustifiable

You’re legally allowed to hold the tenant to the terms of the lease in case they provide unjustifiable reasons for breaking the contract. Breaking lease is inexcusable if tenants are:

  • Moving to a new house
  • Relocating to a new job/school
  • Moving in with a spouse
  • Moving to be close to family

Terminating a lease agreement can come with unforeseen nightmares. As a property owner, cushion yourself from this by writing a thorough lease agreement containing a legally-binding early termination clause. Another option you can take is to take it off your plate altogether. At Wolfnest, we provide professional property management services that can help you save time and money. We specialize in filling vacant properties, handling tenants, and much more. Start managing properties the Wolfnest way today!

 

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Questions to Ask a Property Manager Before Hiring In Utah

Questions to Ask a Property Manager Before Hiring In Utah

Questions to ask a property manager before hiring

Hiring a property manager or company is a big investment. Property management is complicated and fast-paced. It takes talent, dedication, and a unique skill set to succeed in the industry. Because of this, you’ll want to make sure you are choosing the right manager for your properties. In order to be completely confident in your choice, it is important to put together a list of questions to ask a property manager before hiring them. 

Through these interview questions, you will be able to determine a little bit more about the property manager’s experience, knowledge, and ways of doing business.

 

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Types of Interview Questions for a Property Management Company

There are a few main categories of questions to ask a potential management company for your Utah rental property. You will want to find out about their experience, including their understanding of Utah landlord-tenant law. Each state has different regulations and laws, so you will want to make sure the property manager you choose knows the area well.

You will also want to ask about their methods for managing rental property. The way a property manager chooses to operate will help you foresee what types of tenants will be living in your rental property, how maintenance will be handled, and how vacancies will be filled. It’s important to know these things before signing an agreement so that you and your property manager are on the same page about your property.

Understanding any additional fees they may charge, and how termination works is also important when choosing a property manager. You never want to be stuck in a contract with no way out.

Lastly, communication is the key to any great relationship, so you will also want to know how often and through what methods you will be contacting your property manager. Through these questions, hopefully, you will be able to better determine what kind of property manager is the right fit for you.

The Key Questions

There are many property managers out there who may claim to be professionals yet they don’t have the talent or the required skill set. So, how do you tell between a professional property manager and an amateur? The easiest way is to know which specific questions to ask a property manager. 

If you’re a landlord or property owner, here are some of the key questions to ask a property manager before hiring them.

How is Your Fee Structure Determined?

This is one of the most important queries you need to ask before hiring a property manager. There may be additional charges that you don’t know about and knowing the company’s fee structure helps you know every cost that you might incur. 

Ask the property manager to clearly define their fee structure. You can also ask how they determine the rent amount of each rental unit that they manage.

What is the Level of Experience in Managing Rental Properties?

You need to know how long the property manager has been in the industry. More experience means more knowledge about the market. Additionally, experienced property managers have more rental units. This is a key pointer to their quality of service as more rental units mean more clients, which should equal better service. 

Experience is about more than just how many units are managed. Ask about any formal training, applicable state licenses, the Utah eviction process, Fair Housing restrictions, what industry associations they are a part of, or how long they have been managing rentals. These types of questions will help you identify if your property manager has a solid foundation of experience to draw from when facing challenges.

Keep in mind, however, that the oldest property management company isn’t always the best. You want a property manager who keeps up with the industry’s best practices and is always on the lookout for what’s new and innovative. For example, Google wasn’t the first search engine, but their groundbreaking features and increasing market share indicate they are the one people prefer to use. 

Here are some additional questions to ask a potential property management company that will help you gain an understanding of their experience and commitment to their clients:

  1. Are you a licensed property manager? 
  2. Do you have any certifications?
  3. How long have you been managing properties? 
  4. How many properties are you currently managing?
  5. What types of properties are you currently managing?

How Do You Protect Your Clients From Liability?

It is important to get a property manager who’ll have a plan on how to protect you from any liability. Go for a property manager who is well versed in legal agreements regarding all types of property in the state or city.

Ask your potential property manager about managing potential crises. For instance, who should cater for emergency maintenance costs?

What Plans Are in Place to Maximize My Investment?

A great property manager will come up with some plans on how to maximize your investments. This is a very important question as property management is all about making profits. You should go with a company that has your best interests at heart.

What Are Your Criteria for Determining the Rent?

Ask the potential property managers how they plan to set the rent for different rental units. This will help you know how much your property is worth and how much you’ll expect to earn every month. 

It is also important to ask what happens when the rental units are vacant. Some property management companies may continue to charge you even when the unit is vacant.

How Can I Cancel the Management Contract?

One other important question to ask a property manager before hiring, is whether the management agreement will include a termination clause. Many property management companies offer a “satisfaction guarantee” that will allow you to cancel the agreement if you are not happy with the service. This helps prevent you from entering into a long-term agreement only to find out you are unhappy with the service. 

You need to know what conditions allow you to terminate the contract. Don’t get locked into something you can’t easily escape.

How Do You Market Properties?

This question helps you know how the company advertises and whether their plan is effective. Great marketing plans ensure more tenants and improve the income you can earn from the property.

What is Your Cost-Saving Strategy?

Before hiring a property manager, you need to know their cost-saving strategies. This is very important as it helps you know whether or not your investment is in good hands. You’ll ultimately want to know the methods in which they manage their properties. This will help you further decide if it is a good fit, or if you should keep looking. Ask open-ended questions about how they manage rental properties. A few examples might include:
A rental agreement after hiring a property manager.

  1. What do you see as the key factors in keeping a rental property profitable?
  2. What systems do you have in place to effectively handle maintenance issues?
  3. Who handles the maintenance work?
  4. How do you collect rent from tenants?
  5. How do you market vacant properties?
  6. What are the income and screening requirements for applicants?

Answering questions like these will take some thought on the part of your property manager and you will quickly see how well your Utah property management company knows their industry.

How Often Are We Going To Communicate?

Communication is another important management issues to inquire about. Ask about office hours, how long before they return phone calls, or what type of regular communication you can expect. Typically, a property manager who communicates well will also manage your Utah rental property effectively.

Finding the Perfect Fit

In the end, it’s all about finding the property manager that is right for you. These interview questions for a property management company will help you gain a little more insight into how the manager or company run their business and if it’s a good fit. At Wolfnest, we understand how important this relationship is, and that’s why we pride ourselves on giving owners what they want and need for a successful rental property. With Wolfnest, you can customize your management plan by picking and choosing the specific services that you need. If you are looking for a Utah property management company who will work with you and create a lasting relationship, contact us today.

How to Find Renters in Utah

How to Find Renters in Utah

Home blogs to represent finding renters.

Would you rather have an empty property or a tenant who might not pay the rent? This is the dilemma many landlords in Salt Lake City and in other parts of Utah face. Figuring out a strategy on how to find renters can be a struggle, especially when the state undergoes economic endeavors, pandemics, and experiences fluctuating market demands. Here we provide some great tips to help you find renters to keep your properties filled!

Where to look for tenants in Salt Lake City Area?

Below are some of the places you can advertise your property and find the best tenants in Salt Lake City. These methods have different success rates depending on the location of your property. If you’re curious as to which route may be best, contact a property management expert today!

Local listing websites

Local listing websites have large pools of renters who are looking for the newest properties. This is a good opportunity to expose your property to a large number of people in the Salt Lake City area. 

With listing websites, there’s much more scope for advertising your property than some other methods. You can create a detailed listing with the following information:

  • A description of the property location — information about the neighborhood, local amenities, public transportation links, etc. 
  • A description of the property — number of bedrooms, number of bathrooms, the style of the property, etc.
  • Photos/videos of the property.
  • A map of the layout of the property.
  • Rental price.
  • Security deposit information.
  • The length of the lease.
  • Property rules — for example, no smokers or no pet owners.
  • Date of availability.
  • Your contact details — phone number, email address, website, etc.

Different listing websites have different success rates, so you might want to list your property on more than one site. This will increase the chances of you finding good-quality tenants.

Social media

A photo on how to use social media to find renters.
Hundreds of thousands of renters in Utah search for properties on social media platforms like Facebook, Twitter, and Reddit. On social media, you can showcase your property and reach people who don’t use conventional property listing websites.

Facebook

More than 217,000 people in Utah use Facebook, making it a great platform to find local tenants. Here are some local Facebook groups for finding renters:

Twitter

In a list of U.S. states with the most active Twitter users, Utah ranks at No. 31. You can use this social media platform to engage and establish new connections with prospective tenants.

Some of the most popular Twitter hashtags for finding renters in Utah include: 

  • #utahrentals
  • #utahrealestate
  • #slcrentals
  • #saltlakerent

Reddit

Reddit is another great way to find tenants in Salt Lake City. Subreddits like r/Utah and r/SaltLakeCity are hubs for renters looking for the newest local properties. 

Depending on the rules of the subreddit, you can advertise your property and engage with renters via private message.

Print

Despite the rise of social networks, traditional print media is still one of the best ways to attract tenants. Many people in Utah browse the classifieds section of local newspapers to discover properties in their preferred neighborhoods. 

The Salt Lake Tribune

With more than 75,000 readers, The Salt Lake Tribune is the newspaper with the largest paid circulation in Utah. The newspaper has an extensive print classifieds section and posts many rental ads on their website. 

Other local newspapers include:

  • Daily Herald– This popular newspaper, which serves Utah County, posts classified ads here
  • Salt Lake City Weekly– Advertise in this free alternative weekly newspaper here.

Open house

Hosting an open house event is a good opportunity to meet prospective tenants face-to-face. Renters can take a tour of your property and ask you questions. An open house event is also a chance for you to get to know renters a little bit better. You can find out what they do for work or if they have connections to the local area.

Find A Tenant Service With A Property Management Company

All of the methods above can take a considerable amount of your time. Using a reputable property management company in Salt Lake City, on the other hand, provides you with more freedom. A property manager can also help you find better-quality tenants by providing the following tenant placement services:

  • Taking photos/videos of your property.
  • Writing persuasive property listings.
  • Advertising your property on the right platforms. 
  • Preparing marketing materials for your property.
  • Installing a sign in your yard. 
  • Showing your property to prospective tenants. 
  • And much more.

Once you have found the perfect tenants, a property management company will continue to handle all the tasks associated with managing your property, such as preparing leases, collecting security deposits, collecting rent, handling tenants’ complaints, and organizing repairs. 

You will need to find a tenant service that provides you with value for money.

 

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Additional Tip- Always Screen Your Potential Tenants

Regardless of the methods you choose, you should always screen tenants to mitigate the risks associated with renting out your property. Good tenant screening usually involves the following:

  • Credit check.
  • Background check.
  • Identity check.

When you screen tenants, you can find out the following information about prospective tenants:

  • Income and employment details.
  • Previous evictions or late rent payments.
  • Creditworthiness.

How to screen tenants

Screening tenants can be a laborious process because data governance legislation will limit some of the information you can access. You will need to adhere to rules on the federal, state, and local levels — or face penalties for non-compliance. You will need to comply with the Fair Credit Reporting Act (FCRA), for example. It can also take a long time to verify some tenant information, such as employment details. 

With this being said, it’s a good idea to leave tenant screening to the professionals

Choose a property management company

Professional tenant screening provides you with accurate insights into prospective tenants so you can make smarter, more informed choices. You can verify the financial history and financial qualifications of renters and run in-depth background checks. The result? More qualified tenants who are more likely to pay rent on time. Additionally, a property management company can take away the headache for finding renters and plan a strategy on how to find renters for your properties. Contact Wolfnest today if you are looking for tenant placement services!

 

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What is the cost of property management in Utah?

What is the cost of property management in Utah?

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A professional property manager handles all the tasks associated with managing your property, such as tenant screening, handling maintenance issues, collecting rent, and dealing with tenant complaints. Here in Salt Lake City, property management fees — and the services you receive in exchange for these fees — vary depending on the company. Here is everything you need to know about property management costs in Salt Lake City (and the property management price in Utah, in general).

 

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How Much Do Property Managers Charge in Salt Lake City?

A property management fee covers the costs for the services provided by the property manager — repairs, rent-collecting, maintenance, you name it. Sometimes it’s called a monthly management fee. This is usually 8-10 percent of the tenant’s monthly rent, but it could be a lower or higher percentage. (We’ll explain this in detail later.)

 

Typically, landlords will need to pay a tenant placement fee on top of the property management fee. This covers the cost of the tasks associated with tenant placement, such as credit and employment checks. This can cost anywhere from $400-600 per tenant. 

 

Some property managers charge landlords an hourly rate for repairs, which can range from $40-80 an hour. It really all does depend on the property manager.

 

Learn how to Maximize Property Management Cost Savings

 

The 8-10% Rule

Most property managers in Salt Lake City take a percentage of a tenant’s monthly rent, usually 8-10 percent. Here’s an example:

 

  • Sally pays $2,000 a month to rent an apartment in the Sugar House neighborhood. A property management company takes 10 percent of this amount every month, which equals $200. Sally’s landlord keeps the remainder of the rent, which equals $1,800. 

 

  • John pays $2,000 a month to rent an apartment in the East Bench neighborhood. A property management company takes 8 percent of this amount every month, which equals $160. John’s landlord keeps the remainder of the rent, which equals $1,840.

 

As you can see, there’s a considerable difference between 8 and 10 percent. Sally and John pay the same amount of rent every month, but John’s landlord saves $40 a month — that’s $480 a year — because the property management company charges him a lower percentage. 

 

Some property managers charge less for their services than others, but the price isn’t always an indicator of quality.

 

Here are some things to consider when renting out your property

 

Other Property Management Fee Structures

The example above is the most common type of property management fee structure in Salt Lake City, but there is an alternative. 

Some property managers, for example, charge a lower monthly percentage — 5 percent, for example — as well as several “add-on” fees for various services. These include:

 

  • Leasing fees.
  • Marketing fees. 
  • Project management fees. 
  • New customer fees.
  • Transition fees. 

 

As you can see, landlords in this fee structure receive itemized bills for multiple services not covered under the monthly percentage. 

In some cases, this structure suits landlords better and provides them with cost savings. The first example, however, is far more common.

 

What Happens When a Property is Vacant?

This is one of the most common questions about the cost of property management in Salt Lake City. The answer is: It all depends. Some property managers won’t charge you anything if your property is empty in-between tenancies. Others might charge you for their services. Even if there are no tenants in a property, managers might still need to make repairs during this time. Additionally, if your property is vacant, a property management company such as Wolfnest will search, find, and fill a vacant property so that you don’t lose your investment. Let us increase the ROI for your property today!

 

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How To Maximize Tenant Retention

How To Maximize Tenant Retention

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Getting new clients isn’t very easy and each month your property stays vacant is a month you’ve lost income. Did you know improving your tenant retention rates by approximately 5% increases your profits by between 25%-95%? Crazy, right?

But how does a landlord or property owner make their tenants more inclined to stay in their properties? Here are a few ideas that could help you maximize tenant retention.

 

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Begin at Tenant Screening

Tenant screening is the first step to improving your customer retention rate. Finding great tenants means that you’ll avoid many of the issues that sour the relationship between landlords and tenants. 

 

While screening your tenants, make sure to find out a bit of the following:

  • The nature of their employment 
  • How long they plan to stay
  • If they have a family or live alone
  • Their criminal records
  • Credit score

 

These are important factors that will help you know whether or not they are going to become long-term tenants. For better tenant retention rates, go for tenants who have a great history with their past landlords, and are planning to stay for a longer period.

 

Develop a Good Relationship With the Tenants

From the get-go, it’s very easy for tenants to dislike their landlord. But you can develop a great relationship with your tenants to improve the quality of their stay. Tenants who have a great relationship with their landlords will want to stay for a longer period.

 

One of the easiest ways to develop a great relationship with your tenants is by being understanding. Try talking with them as though they are on the same level as you and even when they are late on their rent payment approach them with an understanding tone. 

 

Conduct Research on Why Tenants Are Leaving

This is one of the best ways to learn why tenants are not staying. Finding out why they are leaving gives you very valuable information on how you can improve your tenant retention rates.

 

You can survey the existing tenants by asking them what would make them want to leave. Additionally, you can have exit interviews with tenants who are already vacating to find out their reasons. If it’s something you can fix, try reasoning with them as this might make them stay. 

Continue To Rent The Property Below Market Value

Many owners and property management companies feel that a rent increase should happen every year in order to maximize cash flow. If you are willing to make a small concession to your excellent tenant, it will make them feel valued and will not give them a reason to find a new place to live.

 

Become More Personal

At the end of the day, your tenants are just human, becoming personal lets them see a different version of you. This helps them realize that you are not that different from them. Letting them learn more about your personal life helps deepen the relationship you have with your tenants. 

 

You can become more personal with your tenants by:

  • Sending out holiday and gift cards 
  • Holding regular personal conversations with them
  • Remembering important details about your tenants like their birthdays
  • Letting them know that they can reach out to you at anytime
  • Hosting annual parties where you invite all the tenants 

 

These steps are very important as they’ll help you become closer to your tenants. They will develop a sense of loyalty towards you, making it very hard for them to leave. 

 

Provide Great Incentives

Providing great incentives will improve your tenant retention rates and also attract new tenants. For instance, handle maintenance issues effectively and regularly. You can also go the extra mile to improving your tenants’ living conditions such as installing better insulation in the houses. 

You can also give your tenants gifts just before it’s time for them to renew their lease. Go for something personal that lets them know you are grateful for all the time they have stayed. This will make them feel appreciated and improve the chance of them staying. 

 

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Providing great incentives will improve your tenant retention rates and also attract new tenants. For instance, handle maintenance issues effectively and regularly. You can also go the extra mile to improving your tenants’ living conditions such as installing better insulation in the houses. 

 

You can also give your tenants gifts just before it’s time for them to renew their lease. Go for something personal that lets them know you are grateful for all the time they have stayed. This will make them feel appreciated and improve the chance of them staying. 

 

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How to Choose The Right Tenant For Your Rentals

How to Choose The Right Tenant For Your Rentals

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A person writing a check list for finding the right tenant.
Many landlords in Salt Lake City struggle to find the right tenants for their properties, but there are a lucky few who have multiple qualified applicants. While most property owners would agree this is a good thing, many of them don’t want to fall foul of the Fair Housing Act (FHA), which stipulates that one can’t give preference to a particular tenant because of race, religion, or other qualities. 

It can be tricky. When you have multiple qualified applicants, which one should you choose? And how do you stay compliant with the FHA (and other renters’ rights) in Utah?

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Choosing the right tenant from multiple qualified applicants

You might find yourself in a situation where you have multiple applicants for your rental property, and you don’t know which one to choose because:

  • More than one applicant has a good, stable income and can afford to live in your property.
  • More than one applicant can afford the security deposit
  • More than one applicant has a good credit score with no recent adverse credit history. 
  • More than one applicant has passed your identification checks and has the correct documentation (as required by law).

Create a qualification criteria

A person writing a check list for finding the right tenant.
So you have multiple applicants interested in your property? Congratulations! Now create a list of criteria and apply it equally to all your potential tenants. Your list of criteria might include:

  • A minimum credit score.
  • A minimum income requirement.
  • Proof of previously paid rent, a positive reference from a previous landlord, or both. 

Whatever you decide to include in your list of criteria, it’s important to apply your standards to all applicants. Equally important, you should keep your list in a safe place in case someone alleges you didn’t comply with the FHA. Penalties for FHA non-compliance are extremely expensive, ranging from a maximum of $16,000 for a first-time violation to a maximum of $65,000 for two or more violations within 7 years. 

“Under the FHA, the Department of Justice may bring lawsuits where there is reason to believe that a person or entity is engaged in a ‘pattern or practice’ of discrimination or where a denial of rights to a group of persons raises an issue of general public importance,” says the Department of Justice.

Delve a little deeper

A Landlord using a laptop to promote their rental properties.
If tenants are still equally qualified, delve a little deeper into their references and payment histories. It can be difficult to gauge references from previous landlords, but there are some definite red flags to look out for. When compiling references, discover the following information:

  • Whether prospective tenants received noise complaints from neighbors. 
  • Whether prospective tenants paid rent late (and how many payments were late). 
  • Whether prospective tenants maintained good relationships with landlords. 
  • Whether prospective tenants caused any property damage. 

You might also want to assess a prospective tenant’s background outside of their previous rental commitments. This might include searching for the prospective tenant on social media or Google. As this information is available to the public, you won’t have to ask the applicant for permission. 

It’s important to note that not every applicant will have a spotless record, so you will need to exercise your best judgment. Ultimately, you need to make sure someone pays rent on time and respects your property.

How to choose between tenants who all qualify for your rental property

Once you apply your list of criteria to all prospective tenants, one or more renters might not meet your pre-determined minimum qualifications. This now lowers the number of tenants you have to choose from. However, you could still have multiple candidates who exceed your qualifications. Again, you will need to steer clear of FHA non-compliance. 

There are several things you can do in this situation. Here are just some of the best deciders when choosing between tenant applicants: 

  • You might want to select the tenant that exceeds your requirements the most. This might be the person with the highest credit score, highest income, or best reference from a previous landlord. 
  • You might want to choose the first qualified tenant interested in your property. 
  • You might want to choose the qualified tenant who can move into your property the quickest. 
  • You might want to choose the first qualified tenant who contacted you about your property. Many landlords use the “first come, first served” basis when deciding between multiple qualified tenants. 

Whichever method you choose, you need to stay consistent. It’s a good idea to keep a written account of your reasoning for choosing a qualified tenant in case someone makes a complaint with the relevant housing authority in Utah. Finding the right tenant is tough, but you will want to document the process properly.

Tell all applicants about your qualification criteria and decisions

A blank piece of paper to make a list for choosing the right tenant.
Honesty is the best policy here, and you can stay on the right side of the law by informing all applicants about your qualification criteria. Send written notices to the applicants you didn’t select, and explain your reasons not choosing them. As long as you didn’t base the decision on the applicant’s race, religion, or another quality, you will comply with FHA legislation. 

If you didn’t choose a qualified applicant because of information contained in their credit report, you will need to inform the applicant about this as per the Fair Credit Reporting Act.

Final Word

The Fair Housing Act can be a complicated beast, and making a simple mistake could cost you thousands of dollars in non-compliance penalties. This is why it’s such a good idea to enlist the services of a qualified, reliable Utah property management company that takes care of all the legalities associated with tenant screening. As a result, you can find the best-qualified tenants without breaking the law.

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How COVID-19 Has Influenced Multi-Family Housing Trends in 2020

How COVID-19 Has Influenced Multi-Family Housing Trends in 2020

A photo of multifamily real estate.

The top multifamily housing trends in 2020 may surprise you. With the economy going the way it is, mortgage rates heading toward a record low, and millennials ready to buy, there is sure to be a change.

It’s no surprise that the COVID-19 pandemic has greatly influenced emerging trends in the housing market. Overall, we can say the virus has had a serious impact on the market as a whole. Many state governments are implementing laws meant to help tenants remain at home. The multifamily housing market has encountered many significant challenges due to the pandemic. Nevertheless, multifamily properties that are filled or vacant during this time can still be benefited by property managers to help seek tenant placement, perform everyday maintenance, and ensure tenant satisfaction. Here are some of the top multifamily housing trends in 2020.

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Reduced Demand

Until 2020, the multi-family housing market was experiencing a very large increase in demand. This was particularly from millennials who were beginning to settle down. But the outbreak of the COVID-19 has elicited mixed reactions from various actors in the housing market. Many multi-family firms have experienced challenges in getting construction supplies as more and more countries close their borders.

This decrease has made it hard to construct the estimated 328,000 houses needed to meet the housing demand. But this demand will decrease as more people file for unemployment. Lower incomes mean less demand as people will devote much of the resources to meeting essential needs. The multifamily outlook 2020 will be negatively affected by the coronavirus.

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Growing Investor Interest in Smaller Markets

Multifamily market analysis shows that the present challenges have increased investor interests in smaller markets. Particularly those not as severely affected by the pandemic. The reduced demand in major markets has forced investors to explore the available options in smaller markets. 

Housing markets in states without many rent regulations are also gaining more investor interest. This is because one of the multifamily housing trends is rising rents. But many states have instituted rent control regulations to protect tenants. For this reason, many investors are moving into markets that have fewer regulations. Such markets have a better multifamily outlook in 2020.

More Rent Control Legislation

The growing demand in the multi-family housing market has in the past led to rising housing prices. But this is set to change in 2020 as many states legislate rent control regulations. The regulations have also gained more traction due to the coronavirus pandemic. 

States such as Washington, Illinois, and New York all have rent control legislation that will come into force this year. Rent control regulations in New York caused a 9.2% drop in multi-family investment. This was from a multifamily market analysis. Los Angeles also experienced a 9.8% drop in investment year-over-year.

Multi-Family Will Continue to Perform Better in the Suburbs

The market performance of multi-family housing will continue to do better in the suburbs. This is because more and more families are relocating to the suburbs. Thus, investors will continue to build more houses in these areas, where they can attract more tenants and achieve better rental growth. Suburban areas especially those in smaller markets not severely affected by the coronavirus and will also continue to experience growth.

Entering Age of Digitalization

The role of technology will continue to feature more prominently in the multi-family housing market. Landlords are making their multi-family homes smart by installing Wi-Fi and even video conferencing equipment. This has become a necessity as many workers have to work from home due to the stay-at-home orders. 

Realtors are also adopting technology such as virtual reality. For instance, realtors are now using automated apartment tours through cell phones. One of the emerging multifamily housing trends is self-guided tours. These tours are convenient and help tenants have a better view of the house without interference from the realtor.

Multifamily Housing Trends Outlook

The multifamily housing trends in 2020 are being affected by the ongoing coronavirus pandemic. But the housing market is holding steady. There are still high occupancy levels and growing demand for multifamily houses in smaller markets. This demand is also shifting to states which have less rent control regulations. It is uncertain when things will return to normal. But the multifamily market analysis shows that the housing market is doing quite well giving the circumstances of the economy.

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How to Deal with Difficult Tenants

How to Deal with Difficult Tenants

A professional landlord dealing with bad tenants.

A professional landlord dealing with bad tenants.
Being a landlord sure has its ups and downs. You have seemingly the best, easiest tenants most days. You’re feeling like you’ve made a great investment and you’re living the life. Until you’re not. One day it all hits the fan. You need to prepare yourself for how to deal with difficult tenants. It will happen. If you have kept a great relationship with them, it can be an easy fix. Just make sure your relationship and expectations are clear right from the start.

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Be Clear From the Start

When you first met your tenants, were your expectations clear? Did you do a background check, credit check, and formal interview? This can definitely work in your favor moving forward. An interview is key to starting a healthy landlord/tenant relationship. You can easily get a good or bad vibe from an interview and determine whether it’s someone that is a good fit for the living environment you are offering. Although unforeseen circumstances can always arise, such as noisy neighbors and disagreements, it’s best to put it all out there in the beginning. Make sure they know what is expected of them and that you will do all you can (within reason) to keep them happy in their rental. 

Also, make sure that they understand that this is a professional relationship. Even if you’ve known this person for ages, it does not give them the right to take advantage of your generosity. You are their landlord and they are your tenant. You can be friendly of course, but keep it professional.

Know Your Rights

Keep updated on the rights you have as a landlord in the state you are in. Some states make it very difficult to evict a bad tenant. Even when the tenant is harassing the landlord, or they are being hard to deal with. As long as they are continuing to pay and stop their annoying actions, they may be hard to actually get out. So, know your rights and their rights and stay up to date on them. If you have a tenant that has turned on you and is abusing their rights, legal action can be taken. You deserve to have a respectable tenant who pays their rent on time and takes care of their side of the deal.

Keep Your Cool

When you get a complaint from a tenant, take it seriously. Knowing how to deal with a bad tenant is key. Meet up with them and show compassion. Show that you are on their side, and that you want the problem resolved just as much as they do. Keeping your landlord/tenant relationship good is very important. Once it is clear who is to blame (them, you, another tenant, or a neighbor), be ready to take action.

  • Always be professional. Keep calm at all times and keep your tone friendly. The less personal it gets, the better for everyone.
  • Offer to take care of it immediately. Do your best to make a plan quickly. Just as much as you want this problem to go away, so does everyone involved.
  • Understand the problem. Make sure you take the time to get all the facts. Are you just listening to your tenant complain about a neighbor? Get the neighbor’s side and compare their stories. Decide who is truly to blame and how it should be handled.
  • Show your concern. If this is a normal occurrence from the same tenant regularly, show the concern that they are after and promise to address it.

Apologize. Just apologize. Even if it’s not your fault. Be the bigger man. Some bad tenants are just looking for something to complain about. If you take care of it quickly and apologize for the situation, they will have much more respect for you than if you lose your temper and place blame back on them.

Build Your Landlord/Tenant Relationship

If your tenant knows that they can come to you with a problem and you will fix it quickly and maturely, your tenant will be happy and so will you. This is a big part of knowing how to deal with difficult tenants. Or rather, hopefully stopping them from becoming difficult tenants to begin with. 

You need to be clear, however, that you are here for them and that they too need to hold up their end of the deal. Keep a log of complaints and problems. If it mostly comes back to a certain tenant, you need to have a real conversation with them. Maybe they are not a great fit for your building and you could come to an agreement that would serve you both.

If the problem is with a tenant not paying rent on time, remind them that you have been holding up on your end. You address their needs and take care of everything you promise to. Don’t give them a reason to slack or not pay their rent. Keep the relationship professional and easy. Many people rent because they don’t want to have to take care of certain things (lawn, building maintenance, etc.). Keeping up with your work is just as important, as you can show them that it’s worth it to live in your dwelling.

Hire A Property Manager

If you love the idea of having rental income, yet don’t necessarily know how to deal with bad tenants, hire someone who does! A property manager can be a great resource. They can take care of the things that you don’t have the desire to take care of, yet you still reap the benefits of having an investment property. Simply removing yourself from the situation can feel like a huge weight is lifted off of your shoulders. With our tenant screening and application process, we aim to avoid difficult tenants before problems even arise. Being real estate investors ourselves, we specialize in property management services ranging from single to multi-family homes. Contact a team member and start renting your home without the hassle!

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10 Tips for First-Time Landlords Who Want Better Relationships With Tenants

10 Tips for First-Time Landlords Who Want Better Relationships With Tenants

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A sky scraper building managed by a first time landlord.
A positive landlord-tenant relationship can reduce many of the problems associated with property management. Tenants who maintain positive relations with their landlord throughout their tenancy are more likely to renew contracts and pay rent on time. Whether you’re a first-time landlord or a seasoned expert, all landlords need a guide to renting their multifamily housing units or investment properties at some point. Here are 10 landlord tips to help develop a better relationship with future and current tenants so that you can get the best experience when renting out your property.

#1. Screen tenants

Tenant screening is one of the most important things you can do before renting out your property. It lets you check the following information about a prospective tenant:

  • Background
  • Reference history
  • Credit history
    • Excellent credit — 750 and above
    • Good credit — 700 to 749
    • Fair credit — 650 to 699
    • Poor credit — 600 to 649
    • Bad credit — anything below 600
  • Employment information

All of this information lets you determine the perfect tenant for your property and mitigate risk. You will able to better understand a prospective tenant’s financial situation and prevent non-payment of rent and even eviction. Although tenant screening might requite an outlay, it should provide you with a good investment return.

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#2. Handle security deposits properly

You don’t need to collect a security deposit by law, but a deposit provides you with a financial safeguard in the event a tenant damages your property or doesn’t pay rent. Here are some security deposit tips:

  • Tell your tenants how you will be collecting, holding, and returning their security deposits. 
  • Inspect and document the condition of your property before the tenant moves in. This will avoid any disputes when the tenant moves out. 
  • Make sure your tenant understands the conditions for obtaining the security deposit at the end of the tenancy. 
  • Keep a tenant’s deposit in a safe place. 
  • Carry out an inspection of your property before you return the deposit. You might want to deduct any cleaning charges or damages from the deposit.

#3. Write a lease or agreement

A written lease or month-to-month agreement provides you and your tenant with peace of mind. You should establish what kind of relationship you have with your tenant, as well as the following information:

  • How you will handle tenant complaints.
  • How you will handle repair problems.
  • When you expect the rent.
  • Late penalties for non-payment of rent.
  • Rules about pets and guests.
  • Fire safety information.
  • Other important information about the tenancy. 

Using a property management service such as Wolfnest will take the stress out of tenant leases and agreements.

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#4. Provide secure premises

There are up to 2.6 million robberies in the United States every year, so you need to protect your property from would-be intruders. Here’s how to do it:

  • Install lighting.
  • Set up security cameras and alarms.
  • Trim landscapes. (This lets criminals know that someone is living in your property).
  • Ask your tenants to take the appropriate steps for safeguarding your property, such as locking doors and closing windows when they leave your home.

#5. Perform Repairs

As a landlord, you need to perform some essential repairs by law. Not making repairs on time can often lead to a breakdown in your relationship with a tenant, so it’s important to stay on top of any maintenance commitments. 

Lawsuits can sometimes arise because of injuries caused by defective conditions in properties. Keep your property in good condition to prevent the chances of this happening. This includes fixing any broken fixtures and fittings at the end of the tenancy. 

A property management service can take care of repairs for you, which will save you time.

#6. Give tenants notice before you enter the property

If tenants are living in your property, you need to provide 48 hours written notice before you enter the unit and 24 hours notice if you are showing the unit to a new tenant or purchaser. Not giving enough notice can lead to a strained relationship with tenants.

This shouldn’t stop you from wanting to enter your property, however. It is important you inspect your unit on a regular basis for damages and to make sure your tenants have all the services they require.

#7. Manage property managers

A property manager can take care of many of the tasks associated with the maintenance of your property, including tenant placement, listings management, and inspections. However, not all property managers are the same.

It’s essential that you carry out a full background check on any potential property manager as they will have full access to your unit at all times. In addition, you may be held financially responsible if a property manager is incompetent, negligent, or carries out a criminal offense.

#8. Disclose environmental hazards

You should tell tenants immediately about any environmental hazards on your property, such as mold or lead-based paint. You could be held responsible for a tenant’s health if a problem arises because of exposure to toxic environments. 

Maintaining your property will reduce any environmental hazards, and a property management service can do all the hard work for you.

#9. Resolve disputes

A home managed by a first time landlord.
There are many disputes that can arise over the course of a tenancy, and you should always try to resolve any problems as quickly as you can. Here are some quick tips:

  • Try to work out disputes without involving a lawyer, if you can. 
  • Talk to your tenant about disputes over rent, repairs, deposits, noise, building access, or issues that don’t require immediate eviction. 
  • Try to solve these problems by meeting your tenant face-to-face without hiring a third party.

#10. Obtain insurance

Insurance provides you with a financial safeguard in case a tenant tries to take you to court for alleged discrimination or injuries. You can also take out insurance to cover any costs associated with burglary, vandalism, fire, or storms. 

There are various insurers that will provide you with the financial protection you need, but shop around for the best cover. Comparing insurers online will help you get the best deals on property and liability insurance. 

These are a few tips for new landlords and a refresher for industry experts. Nonetheless, working with a property management company can help you develop deeper relationships with your tenants. Learn more about Wolfnest’s services or call 801-523-4230.

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Things to Consider When Renting Out Your Property

Things to Consider When Renting Out Your Property

A person's handing over keys to rent out their property.

There are many things to consider when renting out your property. It may seem exciting to get some extra cash flow by turning your home into a rental opportunity, but you need to know what to expect. Have you done this before? Are you familiar with the pros and cons? Do you know what you want in the lease?  Before you decide to go for it and turn your house into a rental property, make sure you know exactly what you are getting yourself into.

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Finding Good Tenants

Becoming a landlord is a big deal. Finding good tenants can be a long, difficult waiting game. You don’t just want any tenant, you want a good one. You need someone who will not only take care of your house, but will pay their rent on time. To market your rental and find the best tenant, you will most likely use some kind of out source services that will make your listing easily accessible to potential tenants. There is sure to be a monthly fee until your house gets rented. However long you decided to continue listing, you will continue to pay.

Although a person can be well mannered, seem normal, and have a steady job, for many unassuming landlords they just may become your worst nightmare. It is best to do some further investigation on whether or not you want that person to occupy your house. 

Some basic procedures that you can do to avoid nightmare tenants are:

  • Credit Check – Make sure their credit is up to par and they are able to pay their rent. If their credit is low, they may not be responsible enough for you to take a chance on.
  • Interview – Have questions lined up to interview your tenant. Meet them face to face and see if this is someone that you would like to be your tenant. Ask them what they would do in different rental problem scenarios.
  • Referrals – Request referrals from past landlords, bosses, and/or past neighbors. They can give you a great insight to who this potential tenant really is.
  • Google them – These are the times we live in! Google them, check out their social media. Get a feel for who they are. Performing a background check isn’t a bad idea either.
  • Use a Rental Agent – The benefits of using a rental agent are plentiful. They take care of the leg work, and you get a great tenant.

Benefits of A Rental Agent

Although you may think you are ready to tackle this new idea of having a rental property, it’s really not for everyone. Getting the best tenants can be hard. Maintaining and managing the property can be hard. If it’s something that you would really like to do – but could go without the headache that can come along with it, use a rental agent to list your rental and check out Wolfnest for your property management needs.

A rental agent can take care of marketing your rental, determining the best price, and help you decide what should go in the lease to best protect you. You don’t have to go at this alone. Use professionals for the best experience.

What to Include in a Rental Lease

Tenancy agreements can vary, but do follow a general template. Keep in mind that it is still your house and you are entitled to adjust your terms and conditions accordingly. Besides rent price and payment dates, there are many other things to consider before renting out your property.  Will you allow pets? Does the tenant have use of the yard? Do they have access to the basement and garage? Will you allow them to paint? Is this lease for 1 year, month to month, or minimum of 2 years? You can customize your property requests, but try to stick to the basics. Otherwise, it will be hard to find a tenant willing to jump through all your hoops.

You may see the benefits of a rental agent if you need some help with this part. They will know what’s standard in your area and what a reasonable price is compared to others nearby. A rental agent will also be able to get your listing seen by many, and rented out quickly.

Cost For Maintenance Work

Normal wear and tear is bound to happen, regardless of the tenant. There will be some kind of upkeep or maintenance that you will be required to do. This should also be clear in the lease terms. Are you going to take care of the lawn maintenance, or is the tenant expected to? Are they required to keep paint colors neutral or repaint before they leave? If these are not clear from the beginning, you could end up taking on a lot of extra work.

Think about if the washer and dryer or refrigerator breaks, that’s on you as the owner. You are expected to repair or replace, and quickly. Same with plumbing and heating. Renters want a place that is low maintenance. Tenants don’t want to be responsible for fixing something that isn’t theirs. That’s part of the joy of renting. 

Having an investment opportunity is a great way to earn extra money, but there are so many things to consider before renting out your property. It can become time consuming and expensive if you get bad tenants or don’t prepare yourself ahead of time. Becoming a landlord doesn’t have to be stressful. Let Wolfnest handle the details of renting out your property. Whether it’s single family or multi family rental properties, our fully trained experts are ready to help you find the best tenants, with minimal vacancies, and increase your ROI for your new rental property. Let Wolfnest help you get started today.