Rental Policy Manual

[Mvarga]

Hello All,

I`m currently looking to purchase my first investment property. While reading an article in the Canadian Real Estate Magazine one investor recommended creating a Policy manual which would give you specific actions to take for various things that may pop up (Tenant complaints, flooding etc) . After reading this I thought it sounded like a great Idea. I was wondering if any veteran investors have their own manuals that they would be willing to share to help me to create my own manual. I imagine as a new investor there are many areas that I would over look until they actually occured and this could be a costly lesson to learn. So I am hoping to learn from the experience of others and get some insight into what I should have in my own manual. Feel free to email me at [email protected] if you don`t mind providing me a copy. Or if others would prefer it, they can just post replies and tell me what types of situations they have had happen to them that they would recommend I plan for in advance.

Thanks for any help you can provide.

Matthew

 

[invst4profit]

The first thing, and in my personal opinion the most important thing, is to learn and completely understand the RTA that applies to the provence you are investing in.
It is essential to know the rules of the game if you wish to survive.

 

[Mvarga]

QUOTE (invst4profit @ Dec 13 2009, 09:24 PM) The first thing, and in my personal opinion the most important thing, is to learn and completely understand the RTA that applies to the provence you are investing in.
It is essential to know the rules of the game if you wish to survive.

Thanks Greg, After reading many of your posts it has definately made me realize the importance of understanding the RTA, especially living in Ontario. Do you yourself have a policy manual that you use? Besides knowing the RTA what things do you pre plan for?

 

[housingrental]

Hi Matthew
For what I assume your purchasing and doing - sfh / duplex - self managing one property nearby - what should be sufficient is the following:
1) As Greg suggested learn RTA
2) Document everything - all phone calls / emails / letters to and from tenants
3) Respond asap to everything... toilet leaking call comes in at 10am, you get explicit okay from tenants to have workers in that day, you phone plumber at 10:10am, plumber scheduled to come in at 1pm
4) Follow up with everything. Easy to forget. Schedule follow ups with everything. Ie in toilet example above schedule for 3:30pm to follow up with plumber / tenant to confirm problem is fixed and tenant is satisfied.
5) Creating a detailed policy response type document would seem like a waste of time for you at this point... do you want to spend time to write up that if there`s a toilet broken do X.... and then when the toilet breaks 2 years from now you`ll read though this book ? or will you just phone a plumber at that point?


Standard operating procedure is for larger organizations...

 

[housingrental]

To add re follow up - don`t assume workers will do what you expect of them - same re tenants...

 

[invst4profit]

QUOTE (Varga @ Dec 14 2009, 11:10 AM) Thanks Greg, After reading many of your posts it has definitely made me realize the importance of understanding the RTA, especially living in Ontario. Do you yourself have a policy manual that you use? Besides knowing the RTA what things do you pre plan for?
No manual just common sense practices.
Meticulous book keeping and record keeping on each unit and tenant.
Staying on top of what is happening with your units. Don`t wait for trouble.
In Ontario always increase your rents the maximum allowable annual amount (It never covers your increased costs).

Never forget you are running a business, if you let feelings slip into your decision making you will be sorry. It is a commonly heard expression in the business that "no good deed goes unpunished"
Never allow yourself to accept excuses or feel sorry for tenants. Don`t make the business personal.
If you feel guilty for having to evict a single mother and child in the dead of winter with no place to go you are not seeing the big picture. It is there fault for getting evicted not yours.
Tenants are not friends (never rent to friends) they are customers and no one needs bad customers.

Admittedly all of that comes across as rather heartless but the point is this is a business requiring you to deal with real people and unless you develop thick skin you will not be cut out for this business, it will eat away at you and potentially cost money, lots of money, all your money.

Have a very clear strict screening policy. This is step 1 in reducing risk. Set standards and stick to them. As an example I do not rent to anyone with a credit score below 620 unless they are recently divorced. Applicants must be willing to give all info I ask for without hesitation or they are rejected as being potentially difficult tenants, I always drive by there present residence, always speak to previous LLs, never trust anything a applicant says to be the truth, I don`t rent to anyone on government benefits (not garnishable), I don`t let tenants pay more than 35% of there income on housing costs, always get there SI#, employers name, photo copy drivers license etc. If there is anything suspect about a applicant don`t waste time researching just reject them and move on. A months lost rent is better than getting a bad tenant.

Have a strictly enforced training policy in place for all tenants. Don`t expect that they know how to be good tenants. There present or previous LL may have trained them to be bad tenants. Make it clear what you expect and what the consequences will be if rules are not followed. Never hesitate to send a N4 explaining it is required by the RTA and your Business Partners personal policy. No exceptions.



Make financial decisions based on profit. Learn how to fix things and know when to replace.
Think functional. Accept the fact that tenants have little respect for your property and can potentially destroy everything.

Rental properties cost more to maintain than you think. A lot more.

 

[MarkKruse]

Patrick Francey, in one of his "treat Real Estate as a business" talks at a REIN meeting, gave as a piece of homework: For the next property you purchase, write down absolutely everything you do right from the search, through acquisition, management and eventually sale.

It sounds to me as if the advice he was giving was to in fact create that manual for yourself. (and then go for continuous improvement...)

Mark

 

[gwasser]

QUOTE (MarkKruse @ Dec 14 2009, 08:33 PM) Patrick Francey, in one of his "treat Real Estate as a business" talks at a REIN meeting, gave as a piece of homework: For the next property you purchase, write down absolutely everything you do right from the search, through acquisition, management and eventually sale.

It sounds to me as if the advice he was giving was to in fact create that manual for yourself. (and then go for continuous improvement...)

Mark
Don Campbell in the Acres weekend and on other occasions has discussed how to deal with renters, including check lists for moving in and out, as well as numerous forms here in the member resource sections of the forum. The Acres handout is titled: `REIN Landlording Secrets`. There is also a handout titled: ;Tenant Survey Results exclusive for REIN members that uncover what tenants focus on when choosing their new rental home.

Hope this helps