I once heard a story about a man that was on the corner selling batting helmets; everyone thought it was the strangest thing.
People would walk by staring and think “This guy is nuts, who would buy a batting helmet in the middle of the….” They were unable to finish the thought due to a thief hiding around the corner with a baseball bat. Knocked them on the head and they are out cold. This is a prime example of supply and demand, as well as what some folks think about hiring a property manager. They wonder why they would need one. After all, Landlording is as simple as just putting up a sign and getting a lease from that forms store. Well, when things go bad, it may be too late to hire a manager and may be hiring a lawyer instead.
Recent activity in the Las Vegas valley has an average of a 2.5% percent increase on rental averages. This is the product of little inventory. As soon as a property is put on the market, the calls and the applications are flooding in. So now you get someone moved in, everything seems great, right? But can you keep that tenant happy and keep yourself square with the NRS Law
( Nevada Revised Statues)? Let’s find out.
Application screening is the crucial moment for Landlords and property managers. This is something to be extremely concerned about when choosing a property manager. Choose one that will screen wisely and procure you the best tenant for your property. But there is a fine line between what is acceptable and what is not. Job history, credit history, previous rental details are all very important. However, property managers should never be dabbling into discussions about race, religion, place of origin, etc. These are protected classes! In fact, a recently passed a law that will no longer allow discrimination against criminal history. You can however still look in the back seat of the applicant’s car to get an idea of what the property will look like months after they move in. If it’s full of junk and old fast food bags, you may want to wait for a more tidy applicant. To stay compliant, use a manager that stays focused and up to date.
This is the very beginning of a tenant’s relationship with your property manager. So the tenants have an approved application, the manager has reviewed and submitted to the owner. The owner says “Great; please collect four times the rent for security deposit. Just in case” Let’s stop right there. Nevada law prohibits a security deposit higher than three times the monthly rent. There are plenty of reasons to accept a higher deposit, but this keeps you aware of your boundaries to stay law abiding.
In regards to our supply and demand issue, many owners are ready for that rental increase! They have seen it on the news everywhere that “PRICES ARE SKY ROCKETING” and “PRICES FOR RENTERS THROUGH THE ROOF”. For Landlords, this is the best news they have heard all day! So we have a few options here, Landlords absolutely have the right to raise rents. However, this is not acceptable in the middle of a lease term and is suggested by Landlords more than you would think. Once a rate is locked in a lease, it must remain that way throughout the term. Lease renewals are the time to introduce an increase if need be.
When retirement season comes (you blink, and it’s already here!) and it’s time to sell. You need to cash in that investment property you have been holding onto, and everything will be smooth sailing from here. But wait, didn’t your property manager just emailed you a copy of a lease renewal just a couple of months ago? Oh well, it’s your house they will have to leave right? Wrong. The tenant’s lease remains in place unless you have an early termination clause. Keep this in mind when working with your property manager to let them know the long range plans. Managers want Landlords happy, sipping a Mai Tai’s while relaxing on the beach. Communication will help keep your goals on track!
So it is possible! With the help of a property manager that is up to date on the current laws, it is absolutely possible to maintain a happy tenant as well as keeping yourself in line with the law. This is an investment. There is no room to cut corners here, and many happy Landlords understand that!