Over the past several weeks, we’ve found ourselves in truly uncharted territory. Nearly everyone around the world has had to make significant changes to their daily lives to combat the spread of coronavirus and, for many of us, the economic implications are just as severe.

We’ve had a lot of landlords asking us for advice on how they should handle this crisis. There are a lot of uncertainties for landlords right now. We’re all asking ourselves questions like:

What if my tenants can’t pay the rent?

What if they get sick?

What if I need to show a property?

What if I need to evict someone?

These are all real fears, so we’d like to take some time to address them. Here is our best advice for landlords during these trying times.

Communication is key

The first thing you should do to alleviate any issues related to the coronavirus is to simply communicate with all of your tenants.

If you’re like us, you’ve already received close to one hundred emails from various companies about the coronavirus crisis—and you probably don’t care about most of them. But this is likely the one email that your tenants are anxiously awaiting.

Whether it’s a phone call or an email, be sure to reach out to your tenants as soon as possible to let them know you’re aware of the situation, you understand there may be complications, and you’re doing everything you can to make sure everyone gets through this crisis.

And we shouldn’t have to say this, but please make sure your tenants are all safe and healthy before harassing them about rent! You may also want to share some best practices for avoiding infection and keeping your tenants safe. The World Health Organization is always a reliable resource to consult.

The rent question

This is the one we’re all worried about. What happens if my tenants lose their jobs and can’t pay the rent?

This is a difficult situation for landlords to navigate, and the first thing you need to do is accept the fact that rent might not come in on time. Hopefully, you have a nest egg built up for situations just like this—and if not, let this be a lesson!

As mentioned above, we’d recommend first reaching out to your tenants to see if they are anticipating any problems with paying rent. Don’t offer a solution at this point—just wait for their response and then act accordingly. 

The reality is that you have every right to request that rent be paid on time. However, that may not be the greatest move. It’s very unclear at this time, but landlords may be unable to evict tenants in the immediate future—and the idea of evicting a tenant, cleaning a property, and finding new tenants during a pandemic doesn’t sound all that appealing.

With that said, here are a few options to consider if you are having trouble with your tenants paying rent:

Offer to forgive late fees.

Postpone when rent is due.

Offer a payment plan.

Offer to lower or remove rent increases if they keep payments on time.

Offer various tasks or jobs they can do for you to lower rent payments.

If a tenant tells you that they are truly unable to pay the rent, you are well within your limits to request documentation for their loss of income and documentation proving they have no additional funds to pay you.

Our best advice is to work with your tenants during this time. Be considerate of the problems they’re facing and do what you can to come to a mutually-beneficial agreement.

If it means missing a mortgage payment, so be it—there are many efforts coming down the pipeline for mortgage and debt relief. If you’re barely able to make a mortgage payment, you may be better off saving your money for your own needs and any essential repairs that might come up.

Maintenance

Another question many landlords have right now is how to deal with maintenance issues. If you’re handling maintenance yourself, you don’t want to be going into people’s homes and getting infected. And if you’re dealing with an outside vendor, they may be reluctant to do this work as well.

The simple answer is that all non-essential maintenance fixes should be postponed until after the crisis has dissipated. Your tenants can live with a squeaky door or a dripping faucet, but serious issues like leaks and heating problems will still need to be addressed—there’s just no avoiding it.

This is, again, something you’ll want to communicate to your tenants as soon as possible!

Cleaning

For landlords that own multi-family properties, we highly recommend increasing the frequency of cleaning for common areas like hallways and stairways. If possible, consider sanitizing commonly-used surfaces like door handles and mailboxes daily or every other day to minimize the spread of infection amongst your tenants.

If you are cleaning these areas yourself, be sure to wear protective equipment like gloves and masks to minimize your chance of infection. And just like everyone else, be sure to keep yourself safe by washing your hands frequently and practicing social distancing!

These are tough times for everyone, but they’re especially tricky to navigate as a landlord. If you have further questions or you need assistance during these times, please get in touch. We’d be happy to help however we can.

What will you do if your tenants don’t pay?

How can you make sure your insurance policies and leases are up-to-date on current laws and protect you from potential lawsuits?

How will you screen tenants and coordinate advertising, reference checks, key transfers, and walk-through inspections?

Who’s going to keep an eye on your property to catch potential maintenance issues (like that pipe that’s ready to burst) early on?

As many people seem to find out the hard way, there’s a lot that goes into managing a property – it’s far more than simply dealing with the occasional clogged toilet, lost key, leaks, or late rent payments.

That said, not all types of property owners are at a point when they’re ready for a property manager. To see if a property manager is a good fit for your property, take a read through the “10 ways to know” list below.

Important note: not all Boston area property management companies will offer help for all the items below (for example, some management companies really only offer maintenance and rent collection). So if any of these items seem important to you, make sure to check if the property management company you’re looking at actually offers it as a part of their service.

10 Ways to Know If You Need a Property Manager in Boston
You might need a property manager if you want to…

1. …avoid those Friday night emergency maintenance calls from worried tenants about no hot water, leaking pipes, or clogged toilets.

Many people turn to property managers in the first place because they want someone to take care of maintenance issues for them. Generally, not only will a property manager be responsible for responding to your tenant’s plea for help, but also for arranging, meeting, and scheduling the relevant service from plumbers, roofers, maintenance staff, cleaners, etc.

Beyond this, they’ll often deal with unit turnover, cleaning, and repairs after tenants are gone.

And as a bonus, since most property managers will have a regular set of vendors they turn to, they can usually get help out to your tenants far more quickly than you would be able to as an individual owner.

2. …get insight into the best ways to optimize your property so you can earn as much on it as you can.

A good property manager will also have expertise in your area’s market so they can make sure you’re getting market rate.

Additionally, by visiting your properties physically and using their knowledge of the market and what has worked for their other owners, they should be able to give you suggestions for ways you can improve them and increase their value.

3. …quickly fill vacancies and have help finding and screening reliable tenants.

Of course, one of the biggest challenges any landlord faces is finding good tenants who will pay rent on time and take care of the property.

Luckily, many property management companies offer support in helping you fill vacancies, and should have a strong process in place for screening tenants to make sure they are a good fit.

One thing to keep in mind – it’s very much in the property management company’s interest to find you a good tenant! After all, if the tenant turns out to be difficult, it’s going to be the property manager that now has to deal with them, not you.

4. …have some preventative maintenance checks that catch problems early and make sure your property is always in great shape.

Whether it’s making sure you don’t forget to change the air filters every few months, or just knowing someone has eyes on your property to find and take care of problems before they become serious, this preventative maintenance can be a major relief both in peace of mind as well as for your wallet.

5. …pass along the responsibility of tenant communication.

Beyond just maintenance requests, you’d be surprised by how many inquiries tenants have and how much time it can take you to handle them all! Questions about renewals, other properties available, how to use their garbage disposal or their heat/AC, disputes with neighbors, delays in their trash pickup…the list goes on.

Just about any property management company out there will take full responsibility for all tenant communication and become your tenant’s point of contact.

6. …be 100% sure that all your leases and legal documents are up-to-date and in accordance with the current laws.

Unfortunately, it’s harder than most landlords might expect to get their legal docs in order and air-tight against lawsuits or broken leases (in other words, just pulling a template from Google usually doesn’t cut it).

Many property management companies will not only handle the review and signing of leases with the tenants, but also ensure they are fully up-to-date and reviewed by their lawyers.

7. …give your tenants access to streamlined systems to pay rent and make maintenance requests.

One of the biggest benefits of working with a property manager is that they have better, more efficient systems than a solo, self-managed property owner might have.

For example, instead of making the tenant call you directly to make maintenance requests, a property manager will often have their own online portal where tenants can submit them in minutes.

Naturally, this also means they’ll have better, more efficient systems for the landlord as well when it comes to things like financial and maintenance reporting.

8. …have someone take care of all bookkeeping, accounting, and rent collection.

Dealing with the financial side of being a landlord isn’t only time-consuming, but prone to errors.

And this is where property managers can give you serious peace of mind – by taking care of everything on the financial side of things (including delivering a complete 1099 for you at the end of the year with your investment earnings), all you’ll have to do is keep your eyes out for the rent payment landing in your bank account each month.

9. …guarantee that you’re not overpaying on insurance and maintenance, nor undervaluing your property.

There’s a lot to keep in mind and consider as a landlord, and these are just a few of them.

Ideally, a property management company will be partnered with the experts needed to look at your insurance and maintenance costs and see that you’re paying fair prices for them. Beyond this, they should be familiar enough with the Boston market to ensure you’re charging the right rent price and thus getting the full market rate for your property.

10. …make your property truly become a hands-off, passive investment for you to benefit from in the long term.

Put simply, a good property management company will take care of everything related to your property – allowing you to skip out on the stress of tenants and the evenings taken away from your family, other life commitments, or even vacation to deal with it – so truly all you have to do is decide what to do with the rent payment that’ll be hitting your bank account each month.

How do you find a property manager in Boston that offers everything above?

As we’ve said, not all (or even very many) property managers in the Boston area will offer all of the items above.

That said, here at MerGo we do offer our property owners all of these things (as well as a few extras).

To learn more about how MerGo can help you turn your property into a truly passive investment, head to the Our Service page.

As a landlord, maintenance requests from your tenants can be frustrating, time-intensive, and expensive to deal with. Worst of all, they seem to happen at the most inconvenient times—and often need to be dealt with immediately. It’s one of the most common reasons why many landlords will hire a property management company.

That’s why we’ve refined our process for maintenance requests to ensure all of our managed properties are in perfect shape. Handling these issues promptly and correctly keeps everyone happy.

So let’s take a look at how our process works and why maintenance is so important in property management.

Digitizing Maintenance Requests

When you’re managing a single property, maintenance requests via phone call or text are easy  enough to keep track of. But when you’re managing hundreds of properties, you need a system to keep things organized so that every request is routed to the right person and the job gets done on time.

At Mergo, we use an online tenant portal where tenants are able to submit maintenance requests digitally. These get filed in our system so our team can analyze the request and send out the right vendor to take care of the job.

We understand that tenants want to know what’s going on with their request, so we keep them in the loop throughout the entire process by sending them details on who is coming, when they’re coming, how they’re going to fix the problem, and any other information they might need. Then, we send a confirmation when the job is done.

Thanks to this system, we’re able to process large volumes of maintenance requests quickly and efficiently. And because most of this is done automatically and we’re not spending time manually sorting through requests, talking to vendors, and tracking down information, we can keep costs low for our owners.

Addendums and Yearly Checks

While maintenance requests are great, they only work if tenants actually submit them. We want to hear about maintenance issues right when they happen so they can be fixed correctly, which is why we have uniform addendums for all of our properties that clearly outline what we expect from tenants. 

These addendums state that tenants are responsible for minor maintenance like changing light bulbs and batteries in smoke detectors. They also clarify the difference between “normal wear and tear”—which is to be expected from any rental and should be covered by the owner—and damage from negligent use or wrongful intent, which the tenant would be charged for.

But most importantly, these addendums state that tenants are required to notify us immediately of any maintenance issues in their home. That way, we can know about issues as soon as they occur.

Even then, we don’t live in a perfect world and we can’t reasonably expect that every single tenant will inform us of maintenance issues. That’s why we also have yearly checks where we inspect our properties for maintenance issues or damage, regardless of what we have or have not heard from the tenant. 

A quiet tenant is not necessarily a good tenant, and we want to make sure that our properties are in good shape even when a seemingly great tenant has been staying in them year after year.

Why We Take Maintenance Requests So Seriously

It might seem like we’re going a bit overboard with this process, but there’s a reason why we take this stuff so seriously.

Deferred maintenance is a common problem within property management that can needlessly cut into owner profits. Deferred maintenance is basically the idea that the longer you put off a repair, the more expensive it will get. If you fix a leak right away, it will be fairly inexpensive. But if you let a leak linger for days, weeks, or months, it could cause serious damage to the property that will result in large costs for the owner.

We try to minimize the effects of this by requiring tenants to report maintenance issues immediately and using our tenant portal system to automatically create alerts for problems that are fixed multiple times. For example, if a stove has been fixed three times in one year, we’ll be alerted and will likely replace the stove to stop spending money on repairs year after year. Even though it might be costly to buy a new stove, it’s even more costly to send out repairmen multiple times.

Not only does this prevent the costs associated with deferred maintenance, it keeps tenants happy because their problems are fixed right the first time. We don’t want to be sending vendors out to fix problems multiple times, and neither do the tenants!

Need Help?

Maintenance requests are our bread and butter, and they’re one of the most common reasons why landlords elect to work with us. If you’re getting tired of dealing with maintenance issues in your properties or even if you’re looking for some advice on the best way to handle maintenance as a landlord, we’re here to help.

If you want to get the most out of your investment property as a landlord in the Greater Boston area, you need to be increasing your rent each year to account for inflation, increased maintenance costs, real estate taxes, insurance, utilities, and rising property values. But figuring out how much to increase the rent and actually getting that money from your tenants is a tricky process.

The result is that many landlords who manage their own properties forgo rent increases or postpone them due to the many hassles involved. That means they’re leaving large amounts of money sitting on the table while their expenses increase, resulting in a loss of income.

Let us help you with this process!

At Mergo, we assess each of our properties to determine the right market value out of the gate. Then, we calculate rent increases that are both profitable for owners and realistic for tenants so we can maximize the revenue of each property year after year.

Keep reading for all the specifics on how we do this and a few tips on how to increase rent in your own properties.

Why Does Rent Need to Be Increased?

There are three main reasons to increase rent in your investment properties: vendor cost increases, inflation, and rising property costs due to increased taxes, insurance, and utilities.

As time goes on, vendor costs tend to increase. Materials and labor become more expensive over time, and that means the routine maintenance on your properties will end up costing slightly more each year. This isn’t a massive amount, but it does add up over time and, as an owner, it will eat into your take-home revenue at the end of the day.

Inflation is pretty self-explanatory. As the value of the dollar decreases over time, you need to ask for more money to make up for it! This is one of the most easily justifiable reasons for a rent increase, as inflation tends to increase by around 2% each year. Tenants understand it, owners understand it—it’s straightforward and hard to argue against.

Rising property costs are the final and most important reason for increasing rent, particularly in the Greater Boston area. Insurance costs rise each year along with real estate property values and taxes, utilities, and other costs related to owning a property. As more and more companies continue to set up their headquarters in Boston, it has become a destination for both young professionals and established workers looking to raise a family. Property values have been steadily increasing year after year—especially within city limits—which results in higher cost of ownership.

One of the most common issues we encounter with rent prices is when an owner has had a tenant living in their unit for a significant time—say, five or even ten years—without increasing the rent. 

At that point, the market value of the unit could be several hundred dollars over what the owner is currently charging. It’s a tricky situation—on one hand, you want to maximize the rent in your unit, but on the other hand, you want to keep your tenants happy. This is a problem we deal with all the time, and we work with owners to decide what is best for everyone involved.

How We Handle Rent Increases Each Year

Before we look into rent increases for our owners, we first need to understand what their property is worth. We have a process for determining the ideal rent price of a unit by analyzing the current market value and comparing it with similar, recently rented units. We use this process for any new properties that we take on, and then continue to analyze the value each year to ensure our owners are staying competitive with the market and getting the maximum return on their investment year after year.

If we’re taking on a new property that we find is under market value, we generally need to have a discussion with the owner. We’ll let them know how much they could be getting for their unit, and then talk with them about whether they want to pursue that (and risk losing their current tenant) or go for a smaller increase that will keep their tenant happy and in the unit. In the end, it comes down to what the owner values most. Do they want to maximize their revenue or keep their tenants happy?

For properties that are already at or near market value, we still try to increase rent by some amount each year. Generally, this is between $25 and $100 per month (depending on unit size) to account for all the things mentioned above—vendor cost increases, inflation, and rising property values.

We always inform tenants of rent increases when we send out lease renewal notices in March (for June or September lease cycles) with 14 days to respond. That way, we have plenty of time to market the unit in the event that a tenant chooses to leave.

Looking to Get the Maximum Return on Your Property?

We get it. No one wants to tell their tenants they’re increasing rent, and it can be difficult to figure out the risk versus reward when increasing rent on your properties. But as the owner of an investment property, this is something you need to be doing if you want to get the maximum return on your investment.

We’ve been handling rent increases for our owners for years, and we do our best to make sure that everyone involved is happy and getting what they want out of the deal.

If you need help increasing your rent, just get in touch for a free consultation. We’d be happy to analyze your property and determine the right market value, then provide our suggestions on the best way to increase your rent.

As a full-service property management company, we handle every aspect of our owners’ properties. That means one of our biggest responsibilities is to fill vacancies. Whether a tenant leaves a property or an owner brings us a vacant property, it is in our best interest to fill vacancies as quickly as possible to ensure maximum profits for our owners.

That is why we’ve brought on our own in-house leasing agent, Gretchen Devine.

The difference between in-house and third party

Most property management companies will help their owners fill vacancies, but not all of them have in-house leasing agents. This is an important distinction as it can make a big difference for owners.

Many property management companies will simply outsource their brokerage to third party leasing agents. That means when a vacancy occurs, they send it over to a leasing agent outside of their company to handle it. This is a common tactic that smaller companies will use to avoid having to pay for a full-time leasing agent. If they’re not managing a lot of properties, they may not need a full-time leasing agent because vacancies will be few and far between. But outsourcing this stuff can cause problems, as you’ll see below.

An in-house leasing agent, on the other hand, works directly for the property management company to handle all their vacancies and get qualified tenants in the door quickly. Their number one priority is to make sure that every property managed by the company is filled, and they spend all their time on this one objective.

Why “in-house” is so important

This distinction between an in-house and third party leasing agent is important because it affects how quickly vacancies are filled as well as the quality of tenants. That, in turn, directly affects owner revenue.

At MerGo, when the time comes to rent a property, Gretchen steps in to handle every step in the process of finding a new, qualified tenant. That means she is exclusively listing the unit, conducting all the showings, and communicating with both current and prospective tenants.

To put it simply, this means we are in control of every step of the leasing process. That provides three major benefits for our owners…

First, it ensures that vacancies will be filled as quickly as possible and reduces the potential for vacancies occurring in the first place. It is in our best interest to get these properties filled quickly so that we can get more money into our owners’ pockets and keep them happy. Gretchen is also well-versed in all of our processes and systems, meaning there is no “hand-off” period and she doesn’t have to spend any time “getting up to speed” with the situation.

When property management companies outsource their leasing, there’s no incentive for the agent to get the units filled quickly. They may also be working with many other companies and juggling different priorities, meaning your property could fall to the bottom of the list. At MerGo, Gretchen’s number one and only priority is to fill our properties.

Second, we want to get the best possible tenants in our units because we’re the ones that will be managing them. If we can find great tenants that will stay for multiple years and not cause major issues, that’s great for both us and our owners. It means less work on our end, fewer headaches, lower maintenance costs, and less risk for our owners.

Once again, third party leasing agents have little to no incentive to find high-quality tenants. Once the tenant is in the unit, their job is over. It doesn’t matter whether they stay for one year or five years—they just want to get someone in the door so they can move on to their next gig.

And third, Gretchen understands how we operate. She is well-versed in the units we manage, how our leases are structured, and all the processes we use for vetting tenants and getting them in the door. That means there’s never any confusion when tenants or owners are communicating with us.

She always knows what is going on with each unit we manage, and can provide accurate time frames for when vacancies will be filled. And because she understands our leases in-depth, she can quickly and accurately answer questions from prospective tenants to keep things moving and get tenants in the door quickly.

Meet Gretchen

Gretchen is a real estate rockstar who has been involved (in one way or another) in the industry her entire life. From flipping houses with her father and brother to closing over 200 rental transactions in the Greater Boston Area during the last four years of her career, we’re excited to bring on such a talented professional to our growing team.

Interested in working with MerGo? Need help getting qualified tenants into your properties? Looking to maximize profits on your vacation rental? Click here to request a proposal today.

“What if a tenant damages my property?!” 

It’s a question we’ve been asked thousands of times, and for good reason. It’s one of the most common worries for rental property owners and it’s perhaps the number one reason why people avoid purchasing a rental property as an investment.

Although uncommon, tenant damage is a risk that every owner needs to understand. Regardless of how well you vet your tenants, there is always a chance that they will damage some part of your property. If you’re currently a rental property owner or you’re interested in getting into the industry, you need to be prepared to deal with this.

Luckily, there’s no need to reinvent the wheel here. This is a problem that property owners have been dealing with for as long as it’s been possible to own and rent property. There are many well known safeguards you can put in place to minimize the chance of tenant damage occurring in the first place, as well as limit your liability if something does occur.

In this post, we’ll take a look at how we set our owners up for success and protect them from tenant damage. Doing your homework on this stuff before you get a tenant in your property will help you easily deal with any damages that may crop

Safeguarding yourself from the beginning

The best thing you can do to limit your liability is to set up a few safeguards right at the beginning of your relationship with a new tenant.

One of the best safeguards you can implement is an apartment condition statement. This is a simple form filled out and signed by the tenant when they move in that indicates any damage in the property that occurred prior to their move-in date. For example, if there is already a cracked floor tile in the property when they move in, they would not be held liable for this as long as it was clearly stated on the apartment condition statement.

This form helps protect tenants by ensuring they don’t have to pay for damage they didn’t cause. But it also helps owners by clarifying the exact condition of the apartment before the tenant moved in. To use another example, if you were to find a hole in the wall that was never mentioned on the apartment condition statement, you could reasonably assume that the current tenant caused the damage and hold them liable. From there, you could withhold part of their security deposit (which is a topic for another blog post), send them a bill for the damages, or take legal action if necessary.

An apartment condition statement can be incredibly helpful to clarify whether damage was caused by a current tenant or not. We implement it in every property we manage and it has saved us thousands of dollars. However, it’s only useful if your lease actually holds the tenant responsible for the damages they cause.

In order to make an apartment condition statement work for you, you’ll want to make sure your lease clarifies that tenants are legally responsible for any damages they cause to the property. This is fairly standard, but it’s worth discussing with your lawyer to make sure that your lease clearly states this and that your apartment condition statement can be used to legally verify any damage they may cause while living in your property.

Making use of the right insurance

Insurance is the most obvious way to protect yourself from tenants damaging your rental properties, but there are a few things you need to get right to make sure your insurance is going to work for you.

Ultimately it comes down to two things: having a homeowner’s policy that covers tenants and making sure your tenants have a renter’s insurance policy with enough coverage.

Not all homeowner’s policies are equal, and you’ll want to be sure to inform your insurance provider that you will be having tenants in your property. This will add additional charges, but it can be well worth it as damage from tenants would not be covered on most traditional homeowner policies. If you are renting your property through third-party services like Airbnb or VRBO, they may have additional insurance you can utilize—but don’t count on this entirely, it’s still well worth it to have your own full-fledged homeowner’s policy.

A renter’s policy will also further protect you and your tenants. These policies are inexpensive and have become a common requirement for many property owners, so it’s not as significant of a barrier to entry as you may think. In fact, renter’s insurance stands to benefit the tenant more than you (although it still does benefit you).

Each policy is different, but most will protect a tenant’s possessions, cover accidental damage to the property, and reimburse them for additional living expenses if the property is uninhabitable for any period of time. 

This is important for owners because it can avoid many disputes down the road. It means you will not be held liable for theft or damage to their possessions, and because any accidental damage from the tenant will be covered by their insurance policy, you won’t have to hound them for payments if something does happen.

Confused? Not sure if you have the right policy? We conduct an insurance audit for all of our clients when we take over their properties. If you have questions or concerns about your current insurance, feel free to get in touch and we’ll be happy to take a look.

Understanding the risks

It’s important to remember that, like any investment, there are always inherent risks in real estate. That being said, real estate is unique in that you can control a large portion of the risk yourself. By putting the right safeguards in place, vetting your tenants properly, and doing your homework you can significantly minimize the risks involved in renting your property.

We try to help owners understand that, at the end of the day, they may need to pay a few hundred dollars every now and then for tenant damage. It’s unrealistic to think that you can rent a property out year after year without paying for any damages whatsoever. Even with an apartment condition statement, a thorough lease and insurance, there may be situations where something happens outside of your control. Plus, there’s often value in keeping your tenants happy—even if that means paying for some damages they may be “technically” responsible for.

We always encourage owners to set aside a small amount of money each month to account for damages and repairs. If no tenant damage occurs, great! You’ve saved up some money that you can either put back in your pocket, put towards routine maintenance, or use to upgrade your property in other ways. But if tenant damage does occur and you need to pay for some of it, you won’t be left in the lurch.

Looking for some help managing your property? Need advice on how to deal with a tenant issue? Request a free proposal to find out what Mergo can do for you.