Those of us that invest in real estate want to know how to get the most out of our
investments. Here are a few tips.

Let's start with the condition of a unit. We want to make sure the tenants keep it clean. Since excess clutter can be a potential fire hazard, it should be uncluttered enough to prevent a fire from occurring. In case a fire should occur, they should be able to safely get out. There should be proper ventilation to keep mildew and mold from growing.

Some tenants don't have enough furniture to fill an apartment. Some have so much that mice, roaches and other vermin feel at home too. At least once a year, you should go through all units. Take notes because you will need to remember what you saw. It might be helpful if they take pictures of problems, and it might be better if you look at the units with your manager. Two sets of eyes are always better than one.

Just recently I tried to sell a property for a client. We got a great cash offer, but when it got down to the inspection, even though the owner had installed new windows the
previous month, he had left it up to his on-site manager to run the property. He was surprised when we discovered that all of the bathrooms had to be rebuilt due to dry rot. Of course the one unit he always visited (the manager's unit) was in great shape.
Needless to say the sale died and the client hired an inspection service to identify the problems and established a budget to make the repairs.

Next, consider the exterior of the properties. Some questions: What does it look like at night? Is there enough exterior lighting? Would your tenants feel safe? Would your tenants trip into a pothole or over a bike left in the way by another tenant? Are the stairwell handrails fastened solidly? Could children fall through deck rails or get their head caught between the rails? Decks and stairs should be either painted with an
abrasive surface or an abrasive surface needs to be added. Trip-and-fall injuries are very common, especially in wet areas or where potential tenants or guests cannot see because the lighting is not bright enough.

Swimming pools also attract problems: loud parties, glassware, alcoholic beverages, the potential for unsupervised kids at play, and injuries resulting there from. Most rental properties do not have lifeguards, but pool owners need to post rules. Owners and
managers must be aware of these problems. They should also post pool hours. Preparing for potential problems is just common sense.

We know you or your manager cannot be everywhere. So it is important to think ahead. Buy an insurance policy that can reduce your risk. You should consider a $2,000,000 policy with a potential for two occurrences. You might also want to consider umbrella and earthquake coverage to with it. It is highly unlikely that you will find
coverage for mold and mildew, but you might buy insurance that will cover you for a loss due to a fire or other disaster. You should always consider a replacement cost
policy and building ordinance addendum. Because building codes have changed quite a bit in the past five years, you need enough coverage. If you have a loss, the building will be rebuilt to current building codes.

To help our clients cope with the myriad risks, we have just started a policy requiring all tenants to carry renters insurance. This will help an owner should a tenant cause a problem, and the tenants goods will also be covered should the water pipe break in their unit.

It is clear that investment properties do not run by themselves. Owners and managers need continual training to protect the property and the owner from potential future loss or liability. Understanding the risks and your insurance coverage is critical. Take the time to meet once a year with your insurance agent. All insurance is not equal, and there are fewer companies than ever before that are willing to cover your properties. You must find out what is covered and what is not covered and leave yourself at least 30 to 45 days before you buy new insurance. Things that were fine five years ago are now old and tired, worn-out and not working. Now is the time to use your common sense!