Is now the right time to Rent?

POCONON MOUNTIANS - Throughout the years, persons for New York and New Jersey have bought a home in the Poconos with the intention of either using it as a vacation home and eventually retiring in that home, bought it as a primary home but felt that they were better served by moving back to New York or New Jersey and left them with an empty house and a mortgage payment.

Those who bought a vacation home with the kids now grown and in most cases both Mom and Dad working, have found that the tradition of going to the vacation home in such development as Lake Naomi, Penn Estates, Saw Creek, The Hideout, or others, have also left those people with an empty house or one that is just not utilized as much as the family had envisioned.

Renting your home is an ideal way to keep the cash flowing while you as a family make adjustments to your lifestyle.  "It's an intelligent choice when your personal circumstances change." said Thomas R. Wilkins, CEO of Better Homes and Gardens Real Estate Wilkins & Associates and owner of Wilkins & Associates--PROPERTY MANAGEMENT, formerly NEPA Management Associates, one of the largest property management companies in Northeast Pennsylvania.  "It can be a positive use of your home and a steady source of income if you do some planning beforehand and have help from a property manager or management company such as ours." said Wilkins.

"There are a number of items that must be considered when you are renting your home." Wilkins said.  The most basic involves a drafting of a lease which is that contract which lays out the terms in writing as to what the Landlord and what the tenant are responsible for.  That will lay the ground work as to how, why and what the obligations are of both the landlord and tenant in this agreement.

Then there are the details:

Ø  Do you want to market your home yourself?

Ø  Do you want to have a real estate broker show and rent your home?

Ø  Do you want to have a professional manage your property which takes a portion of the income received every month?

Ø  Do you have enough time in your busy schedule to make sure that all of the above are done correctly to maximize the amount of money that you receive while maintaining the integrity of your home?

The most important and basic documents include the Lease--the binding contract which states what each party will or will not do.

In the past, before the internet, homeowners or landlords would place a classified ad in the real estate section of the local newspaper, doing "hand shake" screening of the tenant, make any repairs that the tenant may request at the time of viewing the property and then simply stop by every month to pick up the rent from the tenant.  Those days are long, long gone.

Today, sometimes you are living 1 ½ to 2 hours from your vacation home or for that matter; your primary home and you don't have the time to pick up your rent every month; not to mention your cost for gas, tolls and other necessities when you have to pick up the rent.  Not to mention different ways the tenant may be able to pay the rent.  That would include certified funds, postal money orders, check, credit cards or through an ACH direct draw from their checking account.

Said Wilkins, "The days of simply doing a hand shake agreement with someone who occupies property you own are over."

"The most common mistake that landlords or owners make is not doing background checks." said Wilkins.  While the credit report does add value to the streaming, in my professional opinion, the two questions of (1) where do you work and how long have you been at your job?; and (2) where have you lived and how long have you lived there? are much more important than reviewing a credit report."

The reason for that is that employment is much more important in today's economy and what industry you are employed in.  If it is an industry that is highly susceptible to lay-offs, down sizing and such, then it may not be a good idea to rent to that tenant depending on where they are in the corporate flow chart.

The second important item is the residency verification.  If the tenant has lived in the property for less than one year, Better Homes and Gardens Real Estate Wilkins & Associates and WA PM will not consider the tenant because they do not have a long enough history with one particular owner for us to make a decision as to whether or not to accept them.  Our minimum requirement is one year.

"Along with the residency verification, if a tenant has been with a landlord for two years, or longer, that would supersede anything that in the credit report.  What that means to us is that the landlord accepts this tenant, they understand the value of keeping a roof above their heads…….continued….

Many owners in the Poconos do in fact rent their homes.  In fact, the Wilkins organization handles a number of management accounts in and around the Pocono area which includes communities located throughout the Pocono Mountains, apartment complexes to the north and the south of the Poconos, single family homes, high end rentals including executive communites and apartments throughout the urban districts of the Poconos.

Patricia Blank-Toombs, Vice President with WA PM and NEPA Management Assoc states that the key to being a good landlord is screening the tenants as much as possible.  "We've always tried to take every precaution to ensure the tenant is financially qualified to occupy that home, condo or townhome (in the most indiscriminate manner) but we do a total screening of the potential tenant for the owners.  All owners sign a landlord authorization form which lets them make the final decision--our office does not.

"For those parties whose homes we manage (meaning we collect the rent and do all of the repairs), we as the property managers make the decision whether to accept or not accept the tenant.  We feel that a necessity because we are going to be dealing with that tenant day in and day out."  Blank Toombs also stated, "the most important part of a landlord/tenant relationship is the tenant.  Those are the parties who are paying the rent and making sure the mortgage gets paid.  In the event the property is vacant, then you need to appreciate that the owner will have to make the mortgage payment.  Secondly, most of our tenants have been with us a number of years and without having turnovers, that's a win/win scenario for any landlord."

Preparation of the home is extremely critical.  "In the past, people showed a house and then let the tenant fix it, taking that money off the rent.  Now, the owner should be prepared for the unit to be rented, you need to make the appearance better.  The more quality you show in the upkeep of your home, the better quality tenant you going to get.  When a tenant sees that the owner does not take care of the property, neither will they.  On the other hand, if the tenant does see that the landlord does take care of his or her home, the better they will keep it.

The final key to a good landlord/tenant relationship is service.  "After the screening process, and the necessary paperwork has been completed, you have to then fulfill the expectations of that tenant for the time that they stay with you which will encourage them to stay even longer.  And what that's customer service." Wilkins said.  "If the tenant complains about a problem, or needs a repair at the home, the landlord must not only respond to that call but respond with a smile on your face!"  At Wilkins & Associates--PROPERTY MANAGEMENT or NEPA Management Associates, we maintain a full-time, full service maintenance department which does nothing but take care of the rental units and the tenant's concerns, problems and repairs.  The lease has been signed by all parties which clearly defines who pay for those services at the end of the day and if it’s the owner, the owner pays Wilkins or if it’s the tenant, the tenant pays Wilkins.  It's as simple as that.

"One of the biggest problems for owners who live out of the area is the amount of time it takes to maintain the home and to hire the purveyor." said Patricia Blank-Toombs, V.P.  A company like NEPA Management Associates or WA PM does so much business with a number of preferred purveyors in the Poconos that when they call a plumber, an electrician, a maintenance man, or such, they can either do it in house, or that purveyor (for services above Wilkins's expertise) will still ensure that the repair is done promptly for the tenant.

"It's very important to make sure that the tenant is happy during their stay." said Blank-Toombs.  "and providing the tenant with customer service is no cost to the owner, and it's something that's expected of a management company such as ours."

The Wilkins organization has their office open 7 days a week.  After hour call are automatically transferred to one of two supervisors who monitor those calls and immediately respond to the tenant to ensure that their comfortable in their home.  If it's an item that can wait until the next morning, then the tenant is explained that and 9 out of 10 times that's accepted by the tenant.

The last part of property management is what happens if the tenant does not pay.  A landlord who rents his or her home on their own typically will not act as quickly as a property management company will because the property management company typically will have computer programs that will automatically spit out to them on a daily basis who is delinquent in their rent, by how many days, and what are the terms of the lease.  If the terms of the lease call for the tenant being taken to magisterial court within 10 days, then the management company will begin that process on the 8^th day to ensure prompt response to non-payment of rent.  "What a tenant doesn't understand sometime is that even though we start an eviction proceeding, as long as they become current in their rent, they will not have to vacate the property.  In this industry, it's called 'pay and stay'." said Wilkins.

The most common mistake that a homeowner makes is letting the situation continue.  The tenant then never catches up and he or she give a series of excuses which the homeowner accepts with either a partial payment or gets nothing in writing which does not protect their position.

Said Wilkins, "The eviction procedure involves knowledge of the law, paperwork, and a trip to the magistrate's office.  Our Management company specializes in doing that kind of work."

Wilkins success rate in the magisterial offices is close to 100%.  Said Wilkins, "As long as you follow the letter of the law, point by point and give the magistrate judge the ability to feel comfortable in the action that has been taken, the courtesies that have been extended to the tenant, and the lease calls for such action, then the judge should and, in our case, does present those findings back to us by winning the judgment.

Better Homes and Gardens Real Estate Wilkins & Associates, who rents homes, town homes and condos and apartments throughout the Poconos always welcome new clients to present in the renting of their property.  Management service is an option that the owner of the home can make after the tenant is found.  NEPA Management Associates, along with Wilkins & Associates--PROPERTY MANAGEMENT, in addition to the other services that they offer, do in fact rent individual homes, town-homes, condos and apartments for owners and then will collect the rent for the period of the lease term.  After which there are typically discounts in the even the tenant does not stay for either the full term of the lease or decides that they do not want to renew.  Often those contracts are negotiated based on a percentage of the rental income that you receive.  By setting the fee that way, the only way the property manager is paid is if the tenant pays.  Therefore, you'll Wilkins is aggressive in collecting rent, and in addition to collect rent at the price that is contracted for.

Thomas R. Wilkins, CEO or Patricia Blank-Toombs, V.P., Rental Manager can be reached any business day at (570) 421-5409 or at (570) 421-8950 and by email at twilkins@wilkins1.com and patriciab@wilkins1.com.  All offices are open 7 days a week.