In this week’s episode, Podcast Host, Property Manager & Business Owner, Andrew Schultz, chats about how to best handle lease agreements when you own multiple rental properties. Should you scatter the lease renewal dates out?
So, you’ve purchased a duplex and have new side-by-side tenants. How do you keep them happy? Maybe it’s a get-together to introduce each other or a quick introduction during move-in day. Learn more during this podcast.
Last, but not least, it’s about that time to do your seasonal maintenance wrap-ups! Find out the best way to coat a cement porch before Winter hits.
Andrew Schultz: (00:00)
Hey everyone. Welcome back to another episode of the Rent Prep for Landlord’s podcast. This is episode number 387. And I’m your host, Andrew Schultz. On today’s episode, we’re gonna be talking about scattering, lease renewal dates for your properties, keeping side-by-side tenants, happy, and the best cement coding systems. We’ll get to all that right after this.
Voice Over: (00:24)
Welcome to the Rent Prep for Landlord’s podcast. Now your host, Andrew Schultz.
Andrew Schultz: (00:29)
Before we jump into today’s episode, have you had a chance to check out the free Rent Prep for Landlord’s Facebook group? We just crossed the 13,000 member threshold and we’re well, on our way to 14,000, if you have a question or a situation that you’ve never encountered before, or you just need to bounce an idea off a big group of housing providers, this is the place. If you haven’t checked it out yet, do it today over at facebook.com/groups/rentprep. Don’t forget to mention the podcast when answering the questions. So we know how you found us
Voice Over: (00:58)
Water cooler wisdom, expert advice from real estate pros.
Andrew Schultz: (01:07)
All of our questions this week, come to us via the Rent Prep for Landlord’s Facebook group. Don’t forget to check that out. If you haven’t already, we’re gonna start things off with water cooler wisdom. This one is all on lease end dates and trying to coordinate them. Let’s go ahead and take a look. All the landlords that have multiple single-family homes. Do you attempt to scatter the renewal dates throughout the year? I have five properties that I self-manage, and I’m starting to question my strategy of having all leases end in may to capitalize on the busier summer months. What do you do? So we don’t actually time our lease end dates at all. We do third-party property management. So we have leases with end dates scattered all over the place. It would be pretty much impossible for us to line everything up to end at the same time.
Andrew Schultz: (01:50)
And we also wouldn’t necessarily want to do that. There are business models where having everything lined up to end at one time makes more sense, but I’ll get into why and how in a minute, let’s start by talking about scattered lease end dates. As I mentioned, that’s how we run our leasing here. Currently, we have clients that onboard and off-board with us at different times of the year, which means that we have properties that come available at different times of the year. We’re not going to write a lease for less than a 12-month period just to keep them on the same lease term as everybody else. We want that one-year lease term. So we write a 12-month lease and we deal with the vacancies as they come up. And honestly, as you start to scale up, having your lease ends at different times of the year provides a lot more consistency in your workflow.
Andrew Schultz: (02:33)
You may only be dealing with one to two vacancies at any time on a portfolio of say 20 doors. Honestly, in my opinion, that’s one of the main reasons that I prefer this business model over a model where all of leases end at the same time period, when all of your leases end at the same time, you could have 15 of your 20 doors all turning at the exact same time. And unless you have a large in-house crew of people to do work, or you have some very, very, very good relationships with contractors and can get everybody lined up and get ’em in and out in short order, getting 15 units turned in a short period of time is gonna be a monster challenge. It’s not a challenge that’s impossible to overcome, but I think that most investors with smaller portfolios will find that they’re better off having rolling lease end dates.
Andrew Schultz: (03:20)
Now, there are some instances where the only business model that works is going to be as business model, where all of the units end at the same time. Typically you’re gonna find this in student housing students typically run either by the semester or by the year. And students are typically only interested in looking for apartments at a couple of times during year. Essentially, they’re looking for an apartment in the months leading up to school starting and in the months leading up to the start of the spring semester. So typically July, August, and then again in December, January are going to be year-busy leasing times for student rentals. But if you don’t have your units on the market and ready to be occupied during that very short timeframe, you’re only going to rent to a student during that timeframe. So if you don’t have it ready and you don’t get a student in there, there’s a good chance that your unit’s going to sit vacant for an extended period of time before you find someone to fill it.
Andrew Schultz: (04:14)
If your market has a lot of temporary labor, you may find that there are different times of the year. That makes sense for all of your leases to end and your new leases to start. So for instance, there are companies that literally travel coast to coast, just planting or just harvesting crops. So those staff members are only in that area for a certain period of time. Typically they’re gonna come in around the same time. And then typically they’re all going to leave around the same time. Oil field workers have the same thing to a lesser extent, but that tends to be more coming and going. Um, with oil field staff. It’s not everyone coming to an area and then everyone leaving all at the same time. So who’s looking at other times of the year? Obviously, families typically are looking during the summer months so that they can get kids settled into a school before the school year starts.
Andrew Schultz: (04:57)
People who are moving into an area as a result of a job offer could be popping up anytime. And we found that in the month of January, we always see a bump in our leasing numbers because of people who decided to get married and people who decided to get divorced over the holidays. And then of course you have the entire rest of the rental market. So if you have a tenant or a prospective tenant and their lease, doesn’t end the same month as all of your leases, and they’re not able to take your apartment in the same month that all of your new leases start, then they’ve completely lost the opportunity to rent from you. Ultimately, I think it boils down to what your market looks like, where your properties are located and what type of business model you want to operate. But for us, having everything renew at one time simply would not work, but there are some instances that it would work well.
Andrew Schultz: (05:43)
So if you’re in a situation where you’re trying to get everything lined up so that it’s on one end date and another new start date, good luck to you. I think it’s a challenge. I think it’s one of those situations that doesn’t work for everybody, but if it works for you and it makes it so that your business works the way that you need, need it to all the more power to you. Our next segment is a bonus water cooler wisdom. Let’s go ahead and jump right in here. We recently purchased a duplex with a shared yard garage and driveway. The landlord will handle snow and lawn maintenance, any helpful tips for rules and regulations for use that will keep the tenants happy living side by side. Again, this one comes from the Rent Prep Landlord’s Facebook group. Uh, I wanna start this one off by saying good on you for specifying.
Andrew Schultz: (06:23)
Who’s taking care of lawn and snow. So many tenants argue over those simple responsibilities when it’s left to them to figure it out. And I think that eliminating that responsibility by taking it on yourself and just including it in the cost of the rent or whatever the case may be, that’s going to eliminate some of your back-and-forth arguments between your tenants right off the bat. We make an active attempt to stay out of drama between tenants whenever possible. Whenever we have a tenant that calls us and states that they’re having a dispute with the neighboring tenant, the first thing we ask them is if they’ve actually had a conversation with them to try to resolve the issue more often than not, we get some runaround and then ultimately find out that they haven’t even tried discussing the issue with the other tenant.
Andrew Schultz: (07:04)
And they’re emotional and they’re upset and they’re not thinking logically. So we send them to do that first, more often than not. And more often than not, adults are capable of resolving the situation that impacts their day-to-day lives. Without you needing to intervene, they live next door to each other 24 7. You don’t live there Mo more often than not. You don’t live there. They need to resolve it themselves. And there are some instances where it’s outright inappropriate for a property manager or a landlord to start getting involved such as when there are threats of physical violence, or especially when a assault has already taken place. At that point, it’s time for law enforcement to be involved. It’s outside of the scope of something that you’re going to handle as a neighbor dispute. We aren’t law enforcement and we don’t need to be out there trying to resolve every single conflict that said, we do have some policies as well as some lease clauses that attempt to help us govern how tenant should interact with each other when they’re living in the same building.
Andrew Schultz: (07:57)
So for reference, the bulk of our management portfolio is one to four-unit properties. So on our duplexes, plexes, and quads, we obviously run into these types of situations every once in a while, with regards to porches yards, balconies, and basements, we treat all of those areas as a shared space. We look at it no different than a common hallway and a larger apartment building all tenants in the building have equal access to those areas. And as long as they aren’t causing any major harm, we typically don’t have any issues. Obviously, we have to watch for things like trampolines and the pools and stuff like that. But we have that concern at pretty much any property that we manage. That’s one of those things that just has to be watched for. So if a tenant wants to go hang out, out, back, or have a barbecue, or have their kids play Outback in the yard, we literally do not care as long as they clean up after themselves.
Andrew Schultz: (08:44)
When they’re done. The only time that we offer exclusivity for anything along those lines is if only one apartment has direct access to it. So if there’s a balcony and only the, the upper apartment has access to that balcony, which is pretty common here in Western New York, we would specify in the lease that they have sole access to that area here in Western New York. And especially in Buffalo, it’s pretty common for the washer and dryer hookups to be down in the basement of the property. Obviously, I just mentioned that basements are considered a shared space for us for the most part. So how does something like that work? So typically speaking, there’s gonna be a set of hookups for each apartment, for a washer and dryer in the basement. Those hookups are gonna be tied to the individual unit’s utilities. So when a tenant brings in their washer and dryer, they would just hook up to the set of hookups for their unit.
Andrew Schultz: (09:31)
Typically, as long as they’re labeled this, isn’t an issue. Occasionally you’ll get a tenant that either accidentally or purposely hooks up to the wrong hookups. That’s typically not something that’s difficult to resolve. Usually, when they get called out on it, they correct the issue immediately. If you do have a situation where one tenant is using another tenant’s hookup that needs to be handled by the utility company as a theft of service issue, yes, you’re gonna be issuing some notices to get the tenant, to move their appliances where they belong. But in terms of any sort of financial restitution, the utility companies need to deal with that situation. That’s not something that you’re going to be able to resolve. What about parking? If you have ample parking, typically that’s not an issue, but I don’t know of too many people that have ample parking at their property in Buffalo.
Andrew Schultz: (10:14)
We have a lot of driveways that are one car wide, but several cars deep. And we treat driveways on a first come first serve basis. And we put that in the lease for everyone living in that building as well. We try not to guarantee driveways to any one tenant unless there’s a reasonable use accommodation or something else that needs to be made. We prefer to just leave those as first come first served we’re upfront and mention that, uh, during showings as well, so that people can make that consideration on parking. When they’re trying to decide whether or not they’re interested in the apartment. And we, generally speaking, don’t have a lot of issues with this either because it forces tenants to work with each other, to resolve the issue. Sometimes you’ll get someone blocking someone else into a driveway or something along those lines. Typically speaking, that’s not gonna be something that you can do much about anyway, unless you have like a towing contract and proper signage posted, et cetera, et cetera, most private towing companies, and police agencies will not tow a vehicle off private property unless you own it and can prove it.
Andrew Schultz: (11:12)
Or you have a contract with them. They won’t just randomly tow someone else’s vehicle off of your property because it’s parked there. For the most part, we do have specific language in our lease with regards to good housekeeping. Uh, what we’re talking about is making sure that tenants keep their units reasonably clean, uh, that they don’t have, you know, unfavorable smells coming out of ’em being amicable. When you run into your fellow tenants on the property, things of that nature. But at the end of the day, you do have to keep in mind that some people just choose not to play. Nice. If you wind up with a tenant, that’s purposely trying to do everything in their power to be difficult. You might have to consider some options at the end of their lease terms, such as non-renewal things of that nature. Hopefully, if your state still permits it, but by and large people are not looking to be in a constant struggle or a constant argument with the people that they have to live with and near. So when you have tenants that live in the same structure, more often than not, they’re gonna find a way to make it work. Even if things aren’t always peachy keen between everyone pick and choose your battles when it comes to stepping in and dealing with tenant drama and good luck with your new tenants
Voice Over: (12:17)
Forum quorum, where we scour the internet for ridiculous posts from landlords and tenants.
Andrew Schultz: (12:26)
Our final segment this week is forum quorum. This one comes from the Rent Prep for Landlords Facebook group. Let’s go ahead and take a look at this one. I have a 20-year-old cement front porch that is fully exposed to all weather locations. And we’re located in Southeast Michigan. There is some pitting and some rusting on the port top cement pad. The stairs are also being replaced because they’re cracked. Does anyone have any experience or recommendations for the Beck exterior coating or system that I could use? This is an interesting one. We deal with a lot of varying weather conditions here in Buffalo, from hot sun to crazy ice and snow. And we do have a lot of properties that have concrete steps. When it comes time to replace a set of concrete steps, you do have a few different options. Option one would be to replace the concrete steps with something that’s not concrete.
Andrew Schultz: (13:15)
Uh, we recently had a property that had a set of concrete steps leading up to it, and we essentially ended up having to put a wood cap over top of the existing concrete steps. We knew that we needed to do the steps we knew. We also needed to do the top of the porch, which was a concrete cap, but for budgetary reasons, we decided, okay, we’re gonna do the stairs in wood this year. And then we’ll redo the concrete cap on the porch next year. And that seems to have worked out pretty well. We ended up busting out the existing concrete steps and reinstalling a set of wooden steps that kind of better match the existing railing system around the porch. Anyway, uh, and then the following year, we did redo that, uh, porch top in concrete from a longevity standpoint, I don’t know as though this is the best option, but obviously wood is going to deteriorate faster than concrete, but it’s also going to be a lot less expensive than concrete option.
Andrew Schultz: (14:07)
Number two would be to install a set of pre-cast concrete steps. Contractors will typically come out and take some measurements, figure out how many steps are needed, the rise, the run, et cetera. They’ll probably give you a price for breaking out the old set of steps and then putting in the new set of steps. Usually, they wind up doing this when some sort of a crane to set the new precast steps off the back of a work truck or something similar. It’s pretty interesting. They don’t actually need as large of a truck as you would expect to move a set of these precast steps and set ’em off the side. Option three would be to have a cap or a coating put on the existing concrete. There are a lot of different companies out there that do epoxy flooring over the top of concrete. And you see it most commonly in places like factories and production facilities, vehicle shops, things of that nature, essentially it makes the concrete much, much easier to clean.
Andrew Schultz: (14:54)
And you can also add things like slip resistance, right into the material as it’s being applied to prevent the surface from being slippery when it gets wet or, you know, reducing the amount of slip. If it gets a little bit of ice buildup on it or something along those lines, they can use the same material on stairs and porches as well to achieve a similar result. A lot of times they will have to come in and either repair cracks or seal the existing concrete that’s been in place before they can run over top of it with the epoxy product. But the end result typically comes out looking very, very sharp and very, very durable. It’s probably not as durable as a set of precast, but it’s also at a lot less cost. So that might be something that’s worth looking into. Finally, depending on how deteriorated the surface is, you may be able to have a concrete company come in and grind down the surface of the pad and either recover it or leave it as an exposed aggregate.
Andrew Schultz: (15:46)
Look, this typically gets priced per square foot. And if you’re only doing a small area, I wouldn’t be surprised if there’s a minimum charge, but depending on the look that you’re going for, this may be a very cost-effective solution to just remove the rust marks and the pits. However, you are going to see that exposed aggregate. So it really boils down to what type of a look are you looking for on your front porch? Definitely an interesting question though, with a cost of concrete, seemingly going up by the day, it definitely makes sense to look at a few different options to see what makes the most sense for you given the fact that you are replacing concrete. And this is probably something you’re only going to do once in your life cycle on this property. I wouldn’t be afraid to spend the money that you need to spend to get the result that you’re looking for.
Andrew Schultz: (16:28)
This isn’t something where you’re going to wanna cheap out because you’re gonna wind up redoing it before you wanna redo it. What are some of the things that landlords do that are illegal either knowingly or unknowingly that could find them in hot water in the latest guide from rent prep, you’ll discover the dos and don’ts of being a landlord, including making repairs, entering the rental and so much more. Check it out today over at rentprep.com/blog. That pretty much wraps up this week’s episode of the rent prep for landlord’s podcast. Thank you all so much for listening. We truly do appreciate it. Our goal with the podcast is to help as many people as possible make educated decisions. When it comes to real estate, you can help us to reach that goal. If you heard something in this week’s episode or any of our other episodes that will help someone, you know, please do us a favor and share it with them.
Andrew Schultz: (17:14)
If you’re looking to get in contact with me, I can be reached over at whatsdrewupto.com from there, you’ll find links to everything going on with me over at Own Buffalo, as well as other projects that we’re working on, you can also grab a free copy of our deal analysis tool over at whatsdrewupto.com. There’s no obligation, and it comes with a companion video showing you how to use it. If you’re looking for top-tier tennis screening services, head on over to rentprep.com, there are multiple products to choose from including a tenant-paid option. If you’re over 50 doors, ask about the enterprise-level programs and pricing. I’ve been at enterprise user of Rent Prep for years now, and it’s definitely changed the way that we screen our tenants. Check that out today, over at rentprep.com. Again, thank you all so much for listening. We’ll be back in a couple weeks with an all-new episode that you won’t wanna miss until then. I’m Andrew Schultz with ownbuffalo.com for rentprep.com and we’ll talk to you soon.
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