Could your rental home be held hostage?

Could your rental home be held hostage?

This happened recently in outside of Fort Collins last month, and sadly, it is not the first time we have heard of rentals and vacant homes being taken hostage by unwanted visitors. There are some tremendous real estate scams out there. Here are a few we have heard of just in the Denver, CO area.

Tenant Bait, Switch and Extortion

In this story, the tenant posed as a real estate agent looking for a property for his clients. The tenant, ‘Garcia’, was not really and agent but was given access to the property, where he promptly began a marijuana growing operation, unbeknownst to the property owner who resides in California. The owner was told that the agent had an organic produce farmer looking for space. Marijuana is legal to grow in Colorado, but, it is still not considered produce. Seven Hispanic men took over the property without permission from the owner and then threatened a racial discrimination lawsuit against him if he didn’t comply with their demands, which included providing a lease to them.

The 40 acre land was converted into a marijuana grow center and Garcia, the mastermind of the extortion deposited over $8,000 into the property owners bank account to force the owner to sign a lease, even though Garcia wasn’t able to provide the required contract documents. The owner felt the issue was resolved and wasn’t willing to be bullied into a lease. He didn’t know that Garcia and his crew had already moved into the property with 245 pot plants. It wasn’t until the out-of-state owner was notified by another real estate agent interested in the property, nearly 3 weeks later, that there were unauthorized tenants, sometimes referred to as ‘squatters’, which is the next story.

Lesson for Landlords gained from this story:

Be certain the person claiming to be an agent, is one. Make sure, especially if you are an out-of-area owner, that you have a good property manager working on your behalf to schedule showings and manage leases.

Read the related article about tenant extortion

It’s Mine Now

Wikipedia describes squatting as: “an action of occupying an abandoned or unoccupied area of land or a building, usually residential, that the squatter does not own, rent or otherwise have lawful permission to use.”

However, there are laws involving ‘adverse possession’ that could potentially allow a squatter to be awarded ownership of a property they have been occupying.  In the state of Colorado, and the cities of Aurora and Denver, this law allows the property to be taken over after 18 years of occupancy or 7 years if they pay property taxes. This sounds like a very long time, and it is. The spirit of adverse possession was to reduce litigations over property usage and ownership. For example, if homeowner Jerry has been allowing neighbor Tom to use a portion of Jerry’s land for farming and then decides he wants to build a barn in that same area Tom can actually use adverse possession to claim he has openly without contest, used the space for 7 years. The court would likely favor Tom over Jerry under these laws.

The main point here is that the possession needs to be uninterrupted in the time period stipulated, and that the owner is aware of it. Homeowners, especially those from out of state, are being required to evict squatters from their properties, at their own expense.

Lesson for Landlords gained from this story:

Make sure that you are doing a regular inspection of your property to ensure there are no unwanted visitors. Consider using alarms, security and/or a property manager if you aren’t able to do an inspection yourself at least monthly.

Read the related article about Colorado homeowner evicting squatters.

Don’t be a victim of tenant scams. A good property management company will screen potential tenants, be there for showings to prevent fraudulent agents or squatters from taking possession of your home and costing you money.

Call 720 989 1996 and let us know your home rental situation.

The top 3 reasons property owners change Property Management Companies

The top 3 reasons property owners change Property Management Companies

As a Denver Metro and Aurora Colorado Property Management company, we never want to see our clients go. And there is something bittersweet about getting clients from another property management company. After all, we want our industry well represented and we want people to get a tremendous value from using a property manager, because “a rising tide lifts all boats”.

Here are the top 3 reasons we have found that causes someone to ‘jump ships’ in the property management world.

  1. Lack of Communication

This problem is certainly not unique to the property management industry. In fact, the irony of our super connected world, where you can communicate with people via dozens of methods, we suffer from lack of communication more than ever. You can call, text, email, Facebook message, leave a voice message, write a note, put a note on an invoice… yet somehow, we fail to know the BEST way to communicate with any given person, and therefore communicate in the way we like best, or sometimes, not at all. We can take for granted that the other person somehow heard from So-and-so, or will know the work was done, the bill was paid, etc. by way of NOT receiving something.

Nothing can lose a customer faster than simple lack of communication. Owners want to know expectations and they want to know results. Without these two things, it is like talking to a sail. Eventually, the owner feels ignored and they go looking for someone to talk to, someone who will listen, someone who lets them know they exist and are appreciated.

  1. Too many tenants

There are a lot of costs involved with getting a rental filled. Marketing the property, spending money on conducting background checks, and labor hours to interview prospective clients, are just a few. Owners have to cover these costs, which cuts into their profits.

When an owner is dealing with constant tenant turnover, it is a hassle, and worse, cuts into their profits.

Why is there high tenant turnover? It can be a result of:

Property Management aurora denver coloradoUnqualified tenants. The Property Manager possibly didn’t do a thorough job of screening the applicant. Even though the applicant was able to produce employment verification and the required deposit money, the employer wasn’t contacted. References, including the former landlord, weren’t called. Basically, due diligence wasn’t done and the tenant ended up being low quality. This happens sometimes- people get laid off or have medical emergencies, but when tenant turnover is high, repetitive and habitual, it is an issue with the manager.

Poor Management. If the Property Manager is neglectful of the tenant, this can result in high turnover. Ever heard the term “slumlord”? This is the term that is applied here. When the Property Manager ignores the legitimate needs of the tenant, is belligerent regarding requests or otherwise is problematic with boundaries, laws or ethics, this is a big problem, and tenants won’t stay.

Tenant Dissatisfaction. This goes hand in hand with poor management, but is separate for another reason. Sometimes the needs of the tenant changes- they moved into a one bedroom and now they have a baby on the way and want a second bedroom. This is not something that can be foreseen or controlled. But, when tenant dissatisfaction comes from the property not being maintained, or the rent is too high, those can contribute to tenant turnover. While most people will say their rent is too costly, there is the truth of what the market is barring. If comparable units are going for a third or half of your unit, tenants are likely not going to stay. A good property manager keeps up on the market trends.

  1. Lack of communication between property owner and property management

This has been said already, but needs to be said again because it is so important. Good communication should be the goal of a Property management company. Owners should expect updates on the property including inspections, any changes and always the status of vendor service orders.

Is it too much for a home rental property owner to be given an update on a repair status? We think not.

If the property management company you are using is no longer steering you the way you want to go and you are looking for a change, Legacy Properties-PM would love to help. Want to avoid the pitfalls of poorly managed, high tenant turnover companies? Call 720 989 1996 and contact Legacy Properties-PM today using the form below.

Free Property Assessment

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How to Find the Best Tenant for Your Investment Property

How to Find the Best Tenant for Your Investment Property

Choosing the best tenant for your investment property can be the difference between loss or profit. As a landlord you want tenants that treat your property like their own. So where do you begin?

Advertise Your Property Wisely

You may not realize it, but advertising is the first step to screening potential tenants. Today landlords have many different ways to get the word out about their property. While putting a rental sign in your window, listing with a realtor, and adding the vacancy to sites like Zillow and Craigslist might be the first thing that comes to mind, don’t overlook the value of social media.

Sites like Twitter and Facebook are a great way to advertise to potential tenants. There’s probably a page on Facebook for landlords in your area to advertise their rentals. Also, don’t overlook the obvious. Word of mouth, print ads, and advertising on bulletin boards have filled rentals. But remember to choose wisely where you advertise. A bulletin board in a coffee shop near a college will attract a different tenant than one in a community center in a stable neighborhood.

Screen Your Tenants Carefully

So your advertising produced a list of prospects. Now it’s time to screen your potential tenants. Many landlords don’t want to offend by asking personal questions, but this isn’t about discrimination. Since you must adhere to the Federal Fair Housing Rules, it’s about protecting your investment. Don’t be afraid to ask hard questions when interviewing. In the very least, conduct a criminal background check verifying the prospect’s name and date of birth with a valid i.d. In addition, run a credit check and verify their income. By taking care of these issues up front, you’ll be able to quickly disqualify the more irresponsible tenants from the more trustworthy ones.

Having to evict a tenant can be aggravating and costly, but with carefully planned advertising and screening it can be prevented. Taking the time to do things properly yourself or by hiring a property management company will get you one step closer to finding the best tenant for your investment property. Call Legacy Properties-PM @ 720.989.1996 or please contact us.

Tax Advantages of Using Property Management in Denver and Aurora Areas

Tax Advantages of Using Property Management in Denver and Aurora Areas

Investing in real estate in the Denver or Aurora area can surpass other financial strategies for supplementing your income whether you are starting out or retired. With tax time just around the corner, it’s time to consider the tax advantages of using reputable property management in Denver. Not only are the real estate services provided by a property manager tax-deductible, but your property manager can keep your records better organized. According to an article by the Houston Chronicle, people who own rental properties can’t usually take time away from their occupations to manage and maintain their properties. In addition to allowing you to continue working in a full-time career or enjoying retirement, hiring a property management company in gives you tax advantages.

  • Deducting what you can

According to the Houston Chronicle, you can deduct professional services such as property management. Typically, you can deduct the expenses of hiring a tax preparer as well. Using a property manager should lower your tax bill or increase your refund. Keep your invoices and statements for your tax preparer.

  • Keeping you organized

Some people have a shoe-box organization system, which means they bring a shoebox full of receipts to their tax preparer. By using a good property manager, you will likely have a well-organized record of the income you made from tenants as well as the expenses that went out to pay for maintenance and repairs. You won’t miss any tax deductions if bookkeeping is not your strong suit. Most property managers keep an electronic copy of records.

  • Qualifying for depreciation

Owning a rental property also qualifies you for rental property depreciation. A publication by the IRS points out you can recover the cost of your rental property that generates you income by “depreciating the property.” To depreciate your property you have to own the property, use it as a rental property and expect the property to last for more than one year and have a useful life. When you make major improvements to your rental property, it often counts under depreciation whereas maintenance is a deduction. Your tax adviser can help you with any complicated figures to determine the correct amount.

At Legacy Properties-PM, we are members of the NARPM, the National Association of Residential Property Managers. For more information on the tax advantages of using property management in Denver, please call 720.989.1996 or contact us.

Free Property Assessment

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Worried About Saving for College for Your Kids? Think About an Investment Property

Worried About Saving for College for Your Kids? Think About an Investment Property

From the time children are very little, parents are told to start saving for college. It’s true that the cost of higher education continues to rise, and financial aid isn’t as generous as it once was, so it is important to plan ahead. To avoid suffocating amounts of student loans, saving is essential. Unfortunately, even with the best intentions, many families don’t have anything left over after paying monthly bills to start a nest egg for education. This is where an investment property can make a big difference.

A wise investment in residential property will provide you with some extra funds that will grow if put in a college savings account. It’s true that even a little bit every month will add up, so if you jump into real estate while your kids are young, you’ll be able to really watch your investment grow. Even if your children are teenagers, you still have the potential to realize some significant savings before they graduate.

With the right property and healthy management, you will probably see your savings grow from month-to-month profit, but you’ll also gain equity in the property. After many years, you could even sell the property and use that money towards college bills, or possibly take out a home equity loan if needed.

In the Denver  & Aurora area, Legacy Properties-PM knows the importance of family. We’re a successful third generation family business that exists because of the wisdom our grandfather saw in investing in real estate. Now we want to help other families build their legacies and realize financial stability by using the things we’ve learned.

Our property management services can help you find a property to invest in, as well as take care of a lot of the responsibilities along the way, so it won’t be a burden on you. We screen tenants, take care of leasing and licensing paperwork, collect rent, deal with maintenance problems and even evict tenants if necessary.

If you’re concerned because you haven’t been able to start saving for your children’s college education, you’re not alone. You may need additional income to set aside for the future. To find out more about doing that through investing in real estate, please call 720 989 1996 or contact us.