Is Your Property Green?

“Going Green” is now the popular thing to do to help save the planet and a productive thing for everyone to so. It might surprise you that it could also help you improve the bottom line of your investment property as well. By improving or adding a variety of maintenance items, you can: 1) save dollars during vacancies. 2) use some as marketing incentives 3)attract better tenancy 4) promote tenant retention 5) avoid serious risks
Take time to review you investment property and see if any of the following items would be beneficial to both helping the planet and increasing you return on investment (ROI)

Add energy saving incentives and savings
With the increase in gasoline, food, and utilities, millions of American are looking for ways to save. There are incentives that may attract tenants if they feel it may help them with their utility bills.
· Install ceiling fans with a switch that changes the airflow direction
· Change light bulbs, such as porch lights, vanity lights, and fluorescent bulbs in kitchens, with new energy saving replacements
· Weatherize doors and windows with weather stripping. Ensure that they adequately close to avoid loss of heating and air conditioning
· Provide adequate insulation throughout the property
· Provide attic ventilation and plug drafty areas
· Replace old water heaters with new energy efficient models
· Replace old appliances, if applicable, such as washers, dryers, and refrigerators with new emergency efficient ones.
· Add low-flow showerheads and faucets
· Install low maintenance landscape and times irrigation systems
Now only will these reduce you utilities, they are also tax deductible. You want good tenants and good tenants look for the best properties. Of a property shows care, it will help attract the quality of tenants that you want. Many of these items will also help to reduce costs when the property is vacant and it is the property owner’s turn to pay the bill until rented.
Avoid areas of risk
Many of the items above may already reduce some risk. however there are certain high areas of risk in property management to avoid for obvious reason and at the same time, reduce a lot of unnecessary waste.
· Running water: avoiding water waste both inside and outside a property I a key area to reduce waste of a necessary resource and to avoid serious risks. No tenant is happy with a running toilet or leaking faucets. If maintenance deteriorates and their water bill increases, it could inspire them to move. In addition, standing water can lead to mold, one of the highest risk factors today in owning and renting property. Settlements of lawsuits are often in the million when awarded for negligence regarding mold.
· Heating and air-conditioning: have yearly inspections on heating and air conditioning units to promote preventative maintenance and avoid costly bills. If necessary, replace units or parts to supply necessary heat and air. This will avoid another area where losses in court can be devastating.
· Load-based paint removal: if built before January 1, 1978, it is a government requirement to remove lead based paint properly and inform tenants in writing. Proper disposal of the paint is important environmentally and to protect your investment.
· Replace old electrical and remove outdated electrical strips. Install adequate covers on outlets to reduce drafts. Repair or replace smoke detectors.
· If applicable, have yearly chimney inspections, Make sure flues close properly to avoid drafts as well as loss of heating and air-conditioning
Perhaps many of these items are already in place, you may need a few changes, or none at all. It is important to reflect on the welfare of your property and your tenants. Then, if it can help reduce global warming and work toward saving our planet, the picture is even better.

Financial Plan

Do you have a financial plan for you maintenance plan? Have you considered how you would cover expenses in the event of a eviction and loss of rent? What funds and coverage will you need if there is a fire? If a disaster happens, such as high winds, tornado, hurricane, fire, and flooding, how will you sustain the property? Insurance may not cover anything. Talk with your bank or available financial institutions about what financing you could obtain if necessary. Even better, establish and emergency find in an interest bearing account, If something happens, you have an immediate resource to use.
You do not want to fall victim to the old adage “fail to plan and plan to fail.” Planning now can help prepare for the unexpected. Of you need assistance, contact us- we are here to help you with you investment property.

Prepare a Maintenance Plan

Just like you home, periodic work is necessary to maintain investment property. Do you have a maintenance plan for future years? It is not practical to bury you head in the sand and “hope for the best” when it comes to roofs, paint, carpeting, appliances, fencing, plumbing, electrical, air-conditioning, heating, miscellaneous repairs, and more. Figure out the life of all major items and make a plan to have work done periodically to avoid unnecessary major rehabilitation. Take a “preventative maintenance” approach to reduce expenses and stress.

Keep Good Property Records

Another area that everyone dreads is an audit by a government agency, particularly the Internal Revenue Service. The best way to prepare for an audit is to create and maintain you investment records consistently and accurately. Keep all tax returns, property management reports, maintenance records, financial receipts, and property documents organized in one place where you can easily retrieve and review them if you have an audit. Maintain them yearly and when you need this information you will have it for any situation, such as an audit or sale of the property. It is much easier to maintain files than try to recreate them later. In Addition they will probably be more accurate.

Renew your insurance

This is probably the most obvious and important item to have in place for unwanted events. It pays to review possible scenarios and coverage with your insurance agent at least once a year. Insurance policies are subject to change, particularly when disasters occur.
With all the disasters that have occurred in the last few years and resulting in high losses, insurance companies are continually making major policy changes. Often notification are obscure or in “small print.” Too often, property owners don’t find out that their insurance does not apply to a particular situation until “after” it happens. Find out specifically what disasters emergencies, tenant damage, and rent losses are covered to not covered.