Property Management Blog

What if Your Tenant Pays Late

Mario Gonzalez - Monday, August 22, 2016

Hey Mario Gonzalez here with Navy to Navy Homes with some more property management tips for you. A question we get all the time from DIY Landlords is, "how should I handle late payments?" This is not if your tenant has completely stopped paying, I just mean a normal late payment. So let's talk about that. If you would like to know more on this subject, if your tenant stops payment, you want to get him out of there, please see our blog on, "when a tenant stops paying all together" or "how to evict a tenant," we have information on that.


So, the first thing if a tenant is late, the question should be, "did they notify you as landlord? Did they let you know of some extraordinary circumstances coming up? Hey, they're traveling, they're this or that, they had some unexpected expenses come up?" That type of thing.  If so, then you may want to communicate to your owner or if you are the owner, you may want to take exception to that to some degree, and I’ll explain how to do that right here at the end.



The second thing is what does your lease say? Do you have a written lease that tells them exactly what, what's going to happen when they're late, and what the circumstances are, are there late fees, etc. So if you have a written lease, then definitely stick by that. However, there is a time that you can really use this to build a relationship.


So let's use a special case. Let's say, it’s around the holidays. They had a child get sick, they had a car accident, they were hospitalized. We've heard them all, and we've seen them all. What I will say is, if you're going to take an exception for one time, say, "I’m going to allow you to pay rent this one time, late, but never again," then I would definitely say you need to follow up in writing, give them a one-time written late rent abatement form that says, "we've accepted it this time, and never again shall we do it." But, let them know that you understand, let them know you're people too and you understand their circumstances and most of the time, those people will pay the late rent. They will pay the late fees as well and they're very accepting to know that you are not going to end the lease, you're not going to give an eviction notice; you are open, willing and accepting of their circumstances. And this is a really rare case where you can build that relationship. Part of owning a rental home allows you to build a relationship with that tenant. Even though it may be, estranged a bit, or distance your property manager in between. But if you use those, all those connections to really build that relationship, say, "hey, I’m an owner and I hear and understand exactly what you're going through," then a late rent, so long as they pay and catch up, again, can be a fantastic way to say, "yes I understand" and actually build that relationship.


So again, we’re not talking about if a tenant stops paying all together. We're just talking if they're late, Just a sideways error. So if you have questions about evicting a tenant or a tenant stops paying all together, please see our other blogs, we're happy to give an information and at any time, feel free to call us here at Navy to Navy, we'll give you any property management advice you like. Thank you.

Carpet vs Tile in a Rental

Mario Gonzalez - Thursday, August 11, 2016

Hey good morning. Mario Gonzalez here for Navy to Navy Homes. Today’s blog we will answer the “Age Old” question from Landlords – Should I put down carpet or should I put down tile? Well if you’re going to make any improvements to your home, you might be surprised to know that the price can be much closer in carpet and tile than you really imagine.


For instance, when we advise people, whichever way they’re going to do, if you’re going to put down carpet, then spend the majority of your money on the actual material itself – the carpet you are selecting and the padding you are selecting because that will help ensure the longevity of it. Conversely with tile, you really want to spend the money on installation, because you can have a great tile, very expensive product, but if its crummy installation, then you’ve really kind of shot yourself in the foot. Likewise, you take a less expensive tile product and really do a lot with the installation. You can angle it, you make like different patterns, etc. that people will do, you know staggered, or you can even have tile that looks like hardwood floor.


So anyway, a little bit more about the carpet versus tile. You can clean both. You can clean carpet overtime but it is hard to overcome traffic wear patterns. You can also have tile and grout cleaned by most professional floor cleaners or carpet cleaners. What we do see is in on average, tile will last much longer than carpet. However, you’re about 50-50 on what people like.


The majority of people like carpet in the bedroom – it keeps the sound down in bedrooms, and if you just carpet the bedrooms, then it’s much easier to replace if there’s any damage or anything like that. It also keeps the people from coming out and hitting the cold floor first thing in the morning. The counter argument, is you do have a lot of people with allergies and those people with allergies don’t want any sort of carpet at home. So what we do see a lot of investors– they will put carpet down just in the bedrooms and then all the wet areas and the common living areas will be a hard surface even to, like the hallway leading up to the bedroom.


In your high traffic areas, tile is going to last you a little bit longer. If you carpet only the bedrooms, then you’ve maximized your investment by saying “okay, I can mix and match carpets if I need to.” You don’t necessarily have to, just as long as it looks close. So if you have more questions, feel free to look at some of our other blogs like, getting your home rent ready, some of the best improvement you can do, top tips to maximize your rental and thanks for checking us out here.


Mario Gonzalez - Tuesday, July 19, 2016

Hey Mario Gonzalez with Navy to Navy Homes. On today's blog we're answering a very important question we get a lot -- "Who pays for the eviction?" That's an important question because it can be very expensive. If you come to that uncomfortable place where you have to evict a tenant, who pays? We'll most more than likely, it is going to be the owner’s expense. Most of the leases are written from the owner to the tenant. So the lawsuit that ensues is actually between the owner and the tenant.


It can be expensive here in Florida. I can speak that the average eviction, uncontested runs between about five to eight hundred dollars; it takes about thirty days from the start to give the eviction process -- thirty to forty days. Now depending upon the way your lease is written, think about the additional expenses in this. The lease is written to maybe give a four-day grace period to pay rent, so it’s due on the first, four or five days and then you have a three day notice, so you're half way into the month before you even start the process -- thirty days after that. When you go through an eviction, you need to worry about the cost of the eviction, and the potential time in this, and losing one to two months of rent at a minimum and then paying to re-lease the home.


It can be very expensive to actually perform an eviction. However, there are some companies out there, Navy to Navy, we offer eviction protection for our owners, for our landlords. Basically for a small monthly fee, we'll cover that five hundred dollar amount under fees in the unlikely condition that we have to evict a tenant. Where that helps the owner, is the owner doesn't have to worry about that additional expense -- something goes wrong; tenants paying late; stops paying; they give us permission to say, "you know what, just go for it, get them out of there," and we can do that. However, let me address this piece -- if it actually goes to court, meaning if it is contested and the tenant wants to go to court, then the fees get very expensive. So your lease has to be specific on this. A good lease will say that whoever goes to court, the prevailing party will actually cover the other lease, the other expenses, and lawyer expenses. Well most tenants think that if they drag you to court and they win, that you're going to pay all their expenses -- not necessarily the case. What’s going to happen is, because you're going to be represented by a lawyer, and it’s really going to be expensive because lawyers work by the hour, the lawyer is most likely going to counter sue for something. So you can go back and forth, literally, we haven't seen this tremendous thing. We have great tenants. But I've heard through the industry, that people have racked up ten and twelve thousand dollars per side in legal fees to fight over five hundred dollars. It’s ridiculous.


Aside from that, how do you protect yourself in this? Well, take a look at our other blogs as far as how to screen tenants; how to protect yourself; your investment; what to do if there's late rent; what to do if this tenant stops paying because the biggest thing in this, for eviction, is really to protect yourself upfront. And that is to properly screen a tenant, work with the management company that is very serious about this, that has written guidelines as to how they, procure and screen like residential selection criteria, how they screen the tenants. And you want a property manager that is always engaged during regular inspections; keeping good communication. The owner and the tenant know that they are there all the time. And that really will help minimize your chance of ever getting to an eviction. So please see our other blogs with regards to that, again, screening tenants; how to handle late fees; what to do if your tenant stops paying etc. And at any time, feel free to give us a call. We're happy to help answer any of your questions here at Navy to Navy. Thanks.

When is it time to Hire a Property Manager

Mario Gonzalez - Wednesday, June 29, 2016


Hey, Mario Gonzalez here with Navy to Navy Homes with some more property management tips. Today’s question is "how do I know if it’s time to hire a property manager." We get this call mainly from landlords who absolutely need a property manager now. And what I mean by that, is they probably put a rent by owner sign; or put an ad on craigslist; they didn't qualify a tenant; they got somebody in there and now…the tenant is in there; there's five other people living in the house; there's three cars on the lawn; five dogs; the home is destroyed; and they're not paying the rent. It's an absolute nightmare. So trust me, that is not the time when you need to hire a property manager. Really, the time you need to hire a property manager is pro-actively, to do it before.


Let’s go over some examples. Before you ever rent your home, or make a decision to rent your home, a property manager is going to do their best to help maximize your return on this home, while minimizing any problems or loss you have. They can see loss, any extraordinary expenses, repairs, that type of thing. They're going to help you start off by marketing that home very quickly, so that you don't have the rent loss and you can get a quality tenant in there. They're going to screen those tenants so you don't have the types of problems like the one mentioned above. You're going to have a quality tenant that's caring for your home and can pay for your home. Another thing they're going to do is, and probably the biggest thing, is they are protecting your investment. Your home is more than likely your largest investment, your largest expense or asset. A property manager is going to care for that the entire time. They're going to put a good quality tenant in there, they're going to minimize your vacancy, they're going to minimize your expenses because the tenant is going to care for it, and they're going to check up on the home to make sure the home is cared for. And ultimately, when you go to sell the home, you have a better product because you won’t have to invest a ton of money into the home to then maximize your sale property.


The second thing, property managers are just help. If you have that tyranny of distance and you’re stressed about any of the smaller repairs, a property manager is going to do all of that for you. Another thing, a property manager is going to have quality vendors that's going to be working on your home. It’s not just somebody that you're picking at random or doing an internet search on that have no experience. The property manager, if they're managing hundreds of homes, has experience with quality license and insured vendors, and they've probably vetted those vendors to make sure that they're good on their prices. A lot of vendors that property managers work with will actually reduce their cost because of volume and that gets passed on to you.


The last thing that the property manager is going to do, they're going to make sure that all your finances with regards to that asset are kept tip-top so when it’s time for the IRS at the end of the year, you don't have to go scrambling, and figure something out and possibly make a mistake on this. Your property manager is going to do all of that for you.

To recap, the best time to hire a property manager is proactively -- when you make a decision to rent the home. And property managers can either help you just place a tenant, or they can fully manage the home. If you have more questions on this, how to pick a quality property manager, you can see our blogs on that, we got that. We also have, "what a property manager does to market your home," another one, "what a property manager does for your finance." So, feel free to check our other blogs about that and as always, at any time, if we can answer your questions, give us a call here at Navy to Navy, happy to chat about you and your investment.

Is Understanding Costing You Money?

Mario Gonzalez - Tuesday, February 2, 2016

People tend to fear what they don’t understand. Homeowners understand fixed rate mortgages and remember the horror stories of people who lost their homes because they could no longer afford them when their adjustable rate mortgages went up.

Interest rates on fixed-rate mortgages have been so low for enough years, that borrowers haven’t even given much consideration to an adjustable rate mortgage. Changes in the way adjustable rate mortgages are now made make them much safer for borrowers who understand how they work but also know they’ll only be in the home for a limited period of time.

Adjustable rate mortgages can go up or down according to an index that the lender has no control. The amount that can be adjusted is limited by caps for each period and for the life of the loan. While there are different periods for ARMs, the most popular lock the first period for five to seven years and then, can adjust annually after that.

One quick and easy way to determine whether an adjustable may be a viable alternative to a fixed would be to determine the maximum payment adjustments possible to find out when the savings from the early years are exhausted which would be the breakeven point. If the borrower is certain they’ll move prior to that date, the ARM will definitely provide a lower cost of housing.

The breakeven point for a $250,000 mortgage would be 8 years 3 months comparing a 2.9% 5/1 adjustable-rate with 1 and 5 caps to a 3.8% fixed-rate mortgage. In the initial five-year period, the payments on the ARM would be $124.32 lower and the unpaid balance would be $3,522 less than the fixed-rate to make a total savings of $10,981.

Whether you’re buying or refinancing, get some good advice from a trusted lending professional about the adjustable-rate alternative. If you’re only going to be in the home a short time after the mortgage is made and your tolerance for risk allows you to feel comfortable, the ARM may be the best choice for you. Check out this  ARM Comparison to use your own numbers.

What's That Smell?

Mario Gonzalez - Tuesday, January 26, 2016

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Homeowners may be totally unaware that their home has an unpleasant odor. It can be unrecognizable to them but immediately apparent to visitors on entering the home.

Candles, aerosol spray or even chocolate chip cookies can’t get rid of the smell. To eliminate the odor, the source of the smell first has to be removed and then, the affected areas can be treated.

Cigarette smoke is particularly offensive to people. It is very common for buyers to refuse to even consider looking at a home where smoking is allowed. This odor permeates the air in a home and soaks into carpets, furniture, drapes, clothing and even the building materials like drywall and cabinets.

Pets may be considered part of the family but it is still a problem when the animals are not adequately house-broken. Urine isn’t just absorbed by the carpet but also the padding and in some cases, the subflooring. Sometimes, walls and floors have to be treated and sealed before painting and new floor covering can be installed.

If a casual friend doesn’t want to hurt your feelings about the jeans you’re wearing, you can bet the ranch that they won’t tell you about the odors in your home. You’ll need to rely on your closest friends to tell you the truth or maybe your mother-in-law.

Remember to Get Your Annual Credit Report

Mario Gonzalez - Tuesday, January 19, 2016


You are probably aware that Federal law entitles you to a free copy of your credit report annually by each of the three credit bureaus: TransUnion, Experian, and Equifax. By regularly looking at each of these reports, you can determine if there are any errors on them and be aware of your credit worthiness.

Instead of ordering all three at the same time, experts recommend that you stagger them throughout the year. This will let you look at your credit at three different times during the year instead of only once a year.

An easy way make this happens on a timely basis is to set a recurring appointment on your digital calendar whether it is on your phone, your email program or a contact manager. Make the appointment to order a free credit report from www.AnnualCreditReport.com a recurring event to take place every four months. You’ll order one report from each of three companies once a year.

You can record that date and the bureau you ordered the last report in the appointment’s note section so that you’ll have a history and won’t try to order the same report twice in one year.

This isn’t just for people who are trying to clean-up their credit. This procedure allows you to monitor your credit to be sure that your report is accurate. You might even discover that someone is illegally using your good credit.

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It's Your Advantage

Mario Gonzalez - Tuesday, January 12, 2016


Technology has certainly streamlined the home buying process and introduced things that help purchasers make better decisions. Buyers have enthusiastically embraced video tours, digital signatures and the enormous amount of information available about a home, neighborhood, schools and neighbors.

The ironic thing is that buyers are ignoring the one single thing that can help them secure the “right” home. Talking to a lender or using a financial calculator is not pre-approval.

Pre-approval requires written verification on employment and income and ordering a credit report for the purpose of obtaining a mortgage. A mortgage credit score is different than what a person might see from credit reporting websites.

Pre-approval gives buyers the confidence to know the amount they can borrow which can result in bargaining power when dealing with a seller or competing against another offer. Transactions can close quicker once a buyer has been pre-approved.

If any issues are discovered in the initial process, the purchaser and lender will have more time to correct them compared to trying to get it done during the loan approval period as stated in the sales contract.

Most lenders best interest rates are only available to the best borrowers. You might get approved on a loan but at a higher rate than you expected which could make a significant difference in the monthly payments.

The “right” home without financing will never have the buyer’s address. Getting pre-approved with a trusted mortgage professional is one of the first steps in the buying process. It can definitely be an advantage that will benefit you in negotiations and ultimately, during the time you own the home.

Early Burnout Could be Good

Mario Gonzalez - Tuesday, January 5, 2016

Most of us understand the expression "burning the candle at both ends" to mean working so hard that you burn yourself out. Normally, that wouldn’t be a good idea unless it is intentional.

If the candle is your mortgage and the strategy is to get it paid off early, being “burned out” would be a good thing. One end of the candle would be your regular mortgage payments and the other end would represent additional principal contributions. Since the Great Recession, lenders have been reporting a higher than normal number of borrowers getting shorter term mortgages not only when they purchase the home originally but when they refinance them also. It seems like the mindset of America’s homeowner has shifted a little from the belief that they will always have a house payment.

The extra $100, $200 or $500 in your checking account isn’t earning interest. Additional principal contributions with your regular payments on a fixed rate mortgage will save interest, build equity and shorten the term of the mortgage.

Wealth management is about making financially wise choices. If having your home paid for by retirement age is one of your goals, making extra contributions regularly could get you there. Use this Equity Accelerator to see how it will affect your loan.

Emergency Ready Kit

Mario Gonzalez - Wednesday, December 30, 2015

The Federal Emergency Management Agency (FEMA) recommends that all Americans have some basic supplies on hand in order to survive for at least three days if an emergency occurs. It is recommended that the Ready Kit should be assembled well in advance of an emergency. The concept is to be able to survive for at least 72 hours until local officials and relief workers arrive on the scene. The disaster could be wide-spread and involve a lot of people that makes it difficult for relief workers to reach everyone immediately.

  • Water, one gallon per person per day for at least three daysFema ready logo2.jpg
  • Food, at least a three-day supply of non-perishable food
  • Battery powered or hand-crank radio and a NOAA weather radio with tone alert and extra batteries for both
  • Flashlight and extra batteries
  • First aid kit
  • Medications (prescription and basic)
  • Whistle to signal for help
  • Dust mask to help filter contaminated air and plastic sheeting and duct tape to shelter in place
  • Moist towelettes, garbage bags and plastic ties for personal sanitation
  • Wrench or pliers to turn off utilities
  • Manual can opener for food
  • Local maps
  • Cell phone with chargers, inverter or solar charger
  • Family and emergency contact information
  • Extra cash
  • Emergency blanket
  • Pet supplies if necessary

Click here for a print version of this list and additional items to consider adding to an emergency ready kit. The American Red Cross has a suggested list for first aid kits and has other items available for purchase at their online store.

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