Investing in real estate is not exactly a private activity. Landlords operate in the public domain and are subject to community laws and standards. Following are a few of the stakeholders and associated parties a real estate investor and their property manager need to be prepared to work with.
Local Code Enforcement
Most municipalities have a code enforcement division. In my city, this division is part of the building and zoning department. Code enforcement ensures that grass is mowed, weeds and brush are removed, and trash is picked up throughout the city. It does many other things as well, including taking complaints from angry tenants and conducting property inspections to follow up on any mandated repairs that may result from a tenant dispute.
Trash And Lawn Care Teams
Most leases for single-family homes stipulate that the tenant is responsible for maintaining the yard and the trash pick-up. In a multi-unit building, the landlord is responsible for these items. Springfield, Ohio is the only city of its size that I know of in America that does not provide trash service. In our city, each property owner must contract with one of the licensed private hauling firms for trash pickup. If a tenant gets behind on their bill, the trash does not get picked up.
As you can imagine, this privatization of public services has resulted in all sorts of unintended consequences. For instance, all the trash haulers run identical routes all over town, duplicating efforts and wasting resources. Second, it is not just tenants who sometimes don’t pay their trash bills. Owner-occupants are not all perfect either. The result is abandoned trash in vacant lots and yards all over the town, but especially in the more depressed and lower-income areas. Code enforcement is responsible for making sure all the abandoned trash is dealt with, and that ultimate financial responsibility falls on the property owner.
Property managers should have a positive and productive relationship with code enforcement, so the department knows who to alert with a courtesy call when an issue arises and can trust that it will be dealt with. Again, the relationship here is paramount.
The Water Department
The local water department can be your best friend or a detriment to your business. Water bills “run with the property.” This means, like property taxes, they are the responsibility of the property owner. While the lease may stipulate that the tenant is responsible for the water bill, if they don’t pay it, the owner of record is responsible.
Recovering damages involves billing back the tenant, or in an extreme situation, evicting them and recovering the costs from their security deposit. Practically, you want a relationship with someone at the department who will alert you if there is a problem and, in the case of vacant properties, get the water turned on and off as necessary in a timely fashion.
Gas And Electric Companies
Set up what are called landlord agreements with your local gas and electric companies. These are designed so that if a tenant moves out without telling management, or fails to pay their monthly bills and their service is cut off, the account reverts back to the property manager. This is critical in the wintertime, when pipes freezing and then breaking when they thaw is a clear and present danger. A broken pipe with water running can cause catastrophic property losses for an owner.
The State Or Local Health Department
You may also find yourself interacting with your county health department. The county health department is responsible for ensuring well and septic systems are safe and maintained to code. If you have a home in the country, they can be a wealth of help and information should you have a water or septic system problem. Your local or state health department may also be responsible for investigating any reports of lead paint exposure by your tenants. Again, these entities offer an abundance of information to help you anticipate and prevent problems that can impact your profitability.
The Neighbors
Being on good terms with the neighborhood is also important. Your neighbors can make or break your investment. If you take care of your property and any problem tenants promptly, generally you will be rewarded with good “press,” and your house will be looked after and protected. Your pride of ownership will be rewarded.