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.

Where Does the Money Come From With Real Estate Investment?

Where Does the Money Come From With Real Estate Investment?

Real estate can be a very lucrative investment to make.  It can be hard to get into, but once you break through, you can make a large amount of money.  In fact, there are a number of different ways to make money on real estate property, and many of them can occur at the same time.  Let’s look at a few different sources of income that might come with a real estate investment.


Appreciation in Real Estate

Appreciation is probably the form of income that is most commonly considered.  Appreciation is a concept that says a piece of real estate property will gain value over time.  A house that you purchase today for $100,000 might sell for $120,000 in 15 years, assuming you do nothing but take care of it.  This is the easiest source of income, because all you have to do is maintain the property, however, it certainly isn’t the most lucrative source.


Rent from Home Rental Real Estate

Rent can be a very large source of income if you don’t live in the property yourself.  Rent income can often solely, or at least mostly, be enough to cover mortgage payments.  Once the mortgage is paid off, this can be a lot of cash in your pocket every month, and the best part is that you can collect rent while the property continues to appreciate.

Fix-up your Real Estate

Every house has a number of improvements that could be made, and many of them are surprisingly simple to do.  Improving a home, of course, raises the value of the house, usually by more than the improvements cost, especially if you do the labor yourself.  For example, if you spend $10,000 on improvements to a $100,000 house, it might be worth $125,000 after you’re finished.  But there’s a hidden benefit to this.  In addition to adding value to the house, you can also charge more for rent after making improvements, which increases that income as well.


Tax Breaks from your Real Estate Investment

This isn’t technically a source of income, but in many ways, paying out less is the same as bringing in more.  You can get a tax break on expenses on a rental property.  This adds even more benefit to the fix-up strategy, because this means it costs even less.  You can also get a tax break for something called depreciation, which doesn’t cost you anything.  That’s a pretty good way to put cash back in your pocket.

Interested in creating income with real estate but not sure where to start?  Call 720.989.1996 or Contact us!  Legacy Properties-PM can help you get started and be there for you, every step of the way.

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An Experienced Property Management Company Will Find You the Best Tenant

An Experienced Property Management Company Will Find You the Best Tenant

Finding a tenant for a vacant residential property isn’t rocket science. You advertise the property, take phone calls, set up appointments to show the house or condo, and then fill out paperwork. A general application should get you the information you need, and that’s all there is to it, right? Why hire a property management company when anyone can do that much?

Quite honestly, it’s the experience that makes the difference. At Legacy Properties-PM, we’ve been placing tenants for decades, and you learn a thing or two in that time. Applicants can look relatively equal on paper, so you have to know what to look for.

For instance, sometimes we have several applicants for a vacancy, and they all appear to be responsible people with verified employment and money for a security deposit and first month’s lease. But maybe we happened to take a peek in the car of one of the applicants when they came out to see the property. Clothes, fast food wrappers, and other garbage covered the floor. How a person takes care of their own property is an indicator of how well they will take care of yours.

Another person showed up late to the appointment, and didn’t really give an explanation or apology. That shows a disregard for other people’s time. And yet another spoke rather rudely, and informed us that they would be signing the lease and moving in the next day. It’s never easy to manage a person that doesn’t recognize who is the person in authority in the situation.

None of these criteria are on paper, but experience and a watchful eye provides us information we can use to choose the best tenant for your property. This information, combined with the application, credit report, and background check provides an assurance that your tenant will take care of your property, pay the rent on time, and abide by the terms of the lease.

If you own investment property in the Denver area and would like to know how Legacy Properties-PM’s experienced property management team can help you find the best tenants, call 720.989.1996 or contact us.

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.

The Top Five Calls You Won’t Get When You Hire a Property Management Company

The Top Five Calls You Won’t Get When You Hire a Property Management Company

Many Colorado landlords struggle with the idea of whether they want a property management company overseeing their investment.

On one hand, it’s nice to be involved and know whats going on. On the other, when things aren’t going well, your phone is ringing constantly and you have non-stop anxiety over dealing with whatever is going on in addition to all your other responsibilities. During those times, it’s easy to make the decision. From a casual poll of property owners who have teamed up with property management, these are the top five calls they don’t miss getting:

  1. “My heat/AC isn’t working.” HVAC is one of those things you don’t give much thought to until there’s a problem, and it usually happens on the hottest or coldest day of the year.
  2. “There’s a lot of water on the floor.” This is usually the start of the conversation, and then you have to play guessing games to figure out what’s going on. Did the toilet overflow? Is there a broken pipe? Maybe the roof is leaking. Water problems are one of those problems you can’t put on the back burner. They must be dealt with immediately.
  3. “My neighbor is too __________.” You fill in the blank. Noisy, smelly, inconsiderate, and the list goes on. It’s hard to know when to get involved in disputes between tenants, and it’s never fun.
  4. “I won’t have my rent until next week.” Chasing down rent is one of the worst tasks, especially from a tenant who chronically pays late. The excuses can get humorous, but the hassle is no laughing matter.
  5. “I know the lease said no pets but…” People are forever signing a lease and then asking to change the agreed upon rules, and many times it’s about pets. One cute little puppy can’t hurt anything, right? Wrong!

Whether you’ve been managing your own investment properties and have experienced these calls before, or are just getting into the game and are not sure you want to handle these types of issues, a property management company will take these calls so you don’t have to deal with them. Enforcing the lease, dealing with maintenance needs, and collecting rent are just a few of the tasks that they take care of so you have more time and less stress.

In the Denver area, Legacy Properties-PM is happy to take these calls. For more information, contact us.