Henderson and Las Vegas Residential Property Management Articles

A single family home illustrated

Is real estate a good investment? With many seasoned investors looking for a place to invest their money, real estate has always been at the top of the board. Or perhaps it’s a real estate enthusiast, first time potential investor looking at their options. The simple answer is: As with any investment, there are variables and there are risks. In this article, we’ll discuss residential rental investments.

Why do many investors decide on residential rentals?

For some, it’s where they will get the most return for their investment. If an investor has cash saved, they may realize that keeping it in a savings account or even higher yield CD (certificate of deposit) will only give them a limited return. However, investing that into a rental property may generate considerably more income and the investment has the potential for appreciation and profit. As a result, a rental property looks appealing.

What are the risks?

Of course, the risks have to be evaluated as well. Many rental owners put down minimal down payments and as a result, end up with a higher mortgage payment and PMI (private mortgage insurance). As a result, the rent they generate may not cover the monthly expenses, which would also include taxes, insurance and possibly HOA dues. As a result, they may be unprepared to cover the difference. A 20 or 25% down payment can eliminate PMI insurance and lower the monthly mortgage payment as well. Of course, in the end, it is best to confer with a property manager to see what rent potential a property has to be better prepared to absorb the costs.

Finding the right property

The type of property will also determine the profitability/cash flow of a property. For example, an older property may have a number of components nearing the end of their life expectancy. HVAC systems, hot water heaters, roofing and appliances can add a significant price tag to the operation of a rental property. Of course, once replaced, those items can last for many years. However, can an investor absorb those expenses since they will be real, cash expenses, even if the property is priced to reflect updates needed? On the other hand, a newer – or brand new – property may ask a higher purchase price. However, there may be limited maintenance expenses in the first few years of operation. These are things to consider when embarking on a purchase.

Be prepared for vacancies

Finally, as an investor of rental property, there will be times when a vacancy occurs and repairs have to be made. As a result, not only will there will be a lack of income but repairs that will cost money. Is this something that you will be able to absorb? Will you be able to save enough each month when generating income to cover those periods of time? Those are difficult but necessary questions to ask yourself. Additionally, market conditions fluctuate and real estate and rental values change. Some rental property owners have had to keep their rental properties for an extended period of time because of that, waiting for values to rebuild perhaps to sell their investment. Other long term investors, who had no plans of selling, had to be patient to see rental rates rise.

When planned correctly, a rental property can be a great investment – and has been for countless property owners. However, calculating the cost and type of investment is an integral part before embarking on being a rental property owner.

Being a mediator can be one of the most challenging aspects of property management. Avoiding disagreements is key to good management.

Running a property management company is not the easiest job out there. Yes, there are a number of moving pieces. For those familiar with property management, you know all too well that when managing a house, your involved in the advertising and leasing process but also the day to day management – the inspections, the unexpected maintenance, HOA violations, insurance claims, bookkeeping and accounting. There is a lot to do.

The challenge

But you also have to be a mediator – and that’s challenging at times. Figuring out who’s responsible for a repair, for example. Is it the owner or tenant? Addressing disputes is perhaps the most challenging aspect of being a property manager and requires know how. Opinions from vendors are necessary. What did they observe? In their professional opinion, do they believe wear and tear contributed to an issue – or was it neglect. What condition was the item in question before? And this is where it can get tricky at times.

How does a property manager or Landlord handle this?

It takes skill and many times reasonableness.

Since property managers are not technicians or contractors, the opinion of a vendor is important. As a homeowner with a rental property, detailed reports are very helpful. A vendor can many times evaluate the age of an item and determine if the wear and tear was the leading cause of failure. For example, if, as a Landlord, you get a call that the dishwasher is leaking, you might wonder if its a pump, seal or something else. A qualified repairman can provide you with a report addressing the specifics – was it a seal on a 15 year old dishwasher? Was it a newly dented door? Those are key details to determine if a Landlord will pay for the repair of if it was caused by a tenant – perhaps due to an accident – and become their responsibility. The same can be applied to air conditioning issues, landscape problems, blinds, flooring issues, other appliances, etc.

While this may seem like a simple concept, many times, those details are not provided. And so, this leads to disputes and hard feelings between tenant and Landlord. So, take the extra step. It might require talking with vendors to get those details documented. Documentation is key. And remember, pictures are worth a thousand words. If you plan on assessing a charge, back it up.

This article discusses the eviction process generally and does not include COVID-19 directives. For details related to COVID-19 directives, visit What You Need to Know About Owning a Rental Property During COVID-19

Nevada has long been known as a state where evictions can be completed relatively quickly. In the last couple of years, however, certain provisions changed some. Nonetheless, the eviction process is still shorter and less complicated than other states.

For non payment of rent, for example, it all starts with a 7 day notice to pay rent or quit, which effectively puts a tenant on notice that rent is due. This step leads to a filing for an eviction with the courts which in turn leads to a constable evicting a tenant from the property. On average, the entire process can take about 30 days.

Of course, there are certain things that can prolong the process and call for additional court appearances. For example, a tenant may file a response with the court. They may object to the eviction for various reasons. That in turn will prolong the process and the case will need to be heard by a judge.

So, what is good practice to avoid complications with evictions?

1. Have a proper lease agreement. A lease that is in accordance with Nevada law will stipulate the requirements of leasing the home. This in turn will prove beneficial when having to deal with an eviction.

2. Ensure that as a landlord, your in compliance with Nevada law as well. Ensuring your property is in habitable condition, for example, can prevent an eviction all together. It is important to realize that as a landlord, you have obligations related to the property also that that can contribute to an eviction.

3. Don’t take an eviction into your own hands. Follow the proper procedure in accordance with Nevada law and know that you cannot complete an eviction on your own.

By having a maintained property, well written lease that complies with Nevada law and a good relationship with your tenants, many evictions can be avoided all together.

An effective property manager is a risk manager for your most valuable investment

What is a property manager? Is it:

1. Someone who collects rent?

2. Someone who leases your home?

3. Someone who manages your rental property?

Anyone of the above answers is correct, however, all three combined really describe what the job description of a property manager involve. Even more so, a property manager can be described as your risk manager for a rental property. How so?

Property managers are usually hired because a property owner either doesn’t have time, know how or resources to effectively manage their property. So, they hire a property manager. But, not all property managers are created equal. Not all are effective risk managers – minimizing the risk that exists in the property management world. For example, not all property managers screen tenants thoroughly. What can this mean? An unqualified tenant can lead to unpaid rent, property damage and evictions. Proper risk management will mean evaluating a tenants qualifications and looking after the owners interests, advising the owner of the risks and looking for a qualified tenant.

Even after a qualified tenant is found, risk management continues. For example, move in and move out walk through inspections allow you to hold a tenant responsible for damages that may have occurred. Periodic property inspections help gauge how a property is being maintained during a tenancy and action can be taken for issues or problems, even if it is normal wear and tear since small problems can become costly ones without proper oversight. And effective bookkeeping and accounting can keep rent payments flowing on time without any issues.

It is clear to see that a property manager is more than a rent collector or a leasing agent. They are an integral part of your most costly investment. So, it is best to choose wisely and to look for more than the least expensive one. It is best to have a property manager that has the skills and expertise to keep your investment occupied, maintained and preserved.

Contributed by Nicklin Property Management

Las Vegas, Henderson Property Management

It almost feels like summer in mid spring. Temperatures are soaring and everyone is feeling the effect! What should you know as we deal with an early heat pattern?

1. Drink plenty of water! Since we just recently came out of a cool season, we may not be accustomed to drinking a lot. However, this is important now more than ever before. Dehydration and heat stroke can result without having plenty of fluids inside. Carry water with you. Cars often times get much hotter than the temperatures outside, so perhaps keep a cooler handy with ice packs and bottled water.

2. Take care of your pets! If your pets tend to stay outside a lot, make sure they also have plenty of water and shelter. Keep a covered area or dog house available for them to take shelter. In extreme temperatures it would also be advisable to limit your pets outdoor activity. Pets can also get dehydrated and succumb to heat.

3. Ensure your landscaping is getting adequate water. During spring, watering restriction only allow you to water your plants 3 times a week. Make sure that your sprinkler system is set up to water during your assigned days. Additionally, ensure that all of your drippers and sprinklers are working property. Replace any that are not. If you notice some plants or grass still struggling, hand watering is best to stay compliant with watering restrictions.

Stay safe and stay cool!

This time of the year, with warmer weather and additional rain, weeds are taking root!  As you drive through the valley, you may notice yards overtaken by them.  Grass that has turned into crabgrass with many bare areas due to weeds.  Rock landscaping engulfed with them.  What can you do to effectively keep them at bay?

With desert landscaping, where no grass is present, the goal is to do regular landscape maintenance.  30 minutes of weed pulling  per week can go a long way!  Always be sure to wear gloves since some weeds have small thorns that can give you a run for your money.  For stubborn weeds that like to spread, you can invest in a small bottle of weed killer that kills dandelions and clover.  Of course, do your research as to choose the right one.  Always wear protection, such as gloves, mask and safety glasses when applying it.

When it comes to grass, the goal is to maintain the grass well.  A thick lawn will repel weeds on its own – not allowing them to take root very easily.  However, if you have a few weeds, it is best to simply pull them.  For weeds that take over a lawn, such as crab grass or other type of grass weeds, you may need to invest in a weed killer that is designated for your specific grass – Bermuda, fescue or something else.  And be sure to figure out what kind of weeds you have since weed killer sprays are usually designed for specific types.  A general grass weed killer may treat most.  However, for some, you will need something different.  A nursery or home improvement store can offer suggestions.

So, keep your yard looking clean and weed free.  Your home will be presentable and your HOA will thank you.