All Forum Posts by: Michelle Fenn

I am taking over property management for a 6 unit apartment building I identified for my buyer.   Upon reading the leases I have discovered half the leases have rent increase clauses that have never been executed once the tenant reached their 12 month anniversary.   I will be writing up new leases reflecting the current terms including the rent increase.   I will bet your under market rent tenant has a similar clause that she accepted and the previous landlord failed to execute.

We started with a lease provided by the local Real Estate investors group and have been amending it over the years.   As we experience new "issues" we amend the lease to address them, examples are use of recycling waste containers, the city fines owner if improper items are placed in the recycle container.  We now have prohibitions against trampolines, pools, and grills on porches, due to insurer requirements.   Explicit definitions of what is an emotional support animal and documentation required to obtain that status.   Our lease is an ever changing document.

I rarely see any buyer loose their EM.  The only time one of my clients was able to keep the EM deposit was when a buyer wrote a full price offer on day one of a listing.  Showed up with contractors 2 weeks later and used the "informal" inspection to try to reduce the offer by about half.   I argued successfully that his actions were that of a buyer with an Option and it was a tactic to tie up the property.  

Get it cut immediately.  If you do not and the city cuts it they will put a large fee on you property tax bill.   Postage size lots get fined 200.00 to cut the grass.  They once hit me with a 700.00 fee on a double vacant lot.    Was not even my lot.      

If the tenant does not cut the grass reliably,hire a landscaper and add  the cost to their rent.   Because most of my younger urban tenants do not want to maintain a lawn, I use what I fondly call urban landscaping.  I put mulch and or river rock over the entire front yard.  

Just had this happen in the past couple months.   The tenants tenancy was terminated.   The upstairs tenant informed us that the down unit occupants moved out at the end of March.  We contacted the tenant and she claimed to be living there and stopped paying rent.  We filed for eviction.  She showed up in "zoom" court hearing and claimed to still be living there, she also claimed she could not understand English.  Funny she could swear at me proficiently in English and Spanish.   The judge gave her an extension and scheduled an interpreter.  She never showed up for the next hearing.  The eviction was granted by Cleveland housing court that boasts it's 93% reduction in evictions.   With our housing court judge I can just imagine the fines if we would claimed abandonment and locked her out. 

My broker advises against letters.  Just closed this week on a home that had multiple offers, all over list, some cash, some with escalation clauses.   The letter from one of the buyers got their offer accepted.   The buyer wanted the house because she boarded her horse at the stables next door.  The seller was going to end up living next to the new buyers.  I advised the sellers that the buyer would overlook many issues with the home to have the stable at the back of the property.   No fair housing issue here, unless of course horses become a new protected class.   LOL

The Unintended consequences will be a shortage of affordable single family houses available to rent. HUD will be required to fund the building of housing projects to meet this need. The result of requiring landlords to provide free housing for over a year will be owners selling SFH to owner occupants. One of the few loop holes in the moratorium. It would be interesting to see the % for rentals that are now gone from the rental market.

Cleveland Magazine published their annual rating the neighborhoods in NE Ohio this month. I looked at the new data with an investor’s priorities in mind. I first looked at tax rates per 100,000 of value followed by school and safety ratings. This provided me with a list of communities that require extra due diligence as the cost to hold and attract quality tenants with families will be high.

As a realtor I am providing a summary of data, I am making no purchase recommendations.  

The highest tax rate cities this year at $4,050 per 100,000 value go to University and Cleveland Hts, which share a school system that ranks in the bottom third of the Cleveland Magazine rating. Both Cleveland Hts and University Hts inner ring suburbs also rank at the bottom third of the safety ratings. Cleveland Hts offers trash pickup but does not provide resident’s trash cans, so the garbage is placed in plastic bags on the curb, is creating a pest issue in many neighborhoods.

Shaker Hts ranks third in taxes at $4,010 per 100,000 value. Shaker Hst has long been known for being a welcoming diverse community, school system ranks in the top third of the education ranking. Also an inner ring suburb, it’s safety ratings are in the middle third.

Garfield Hts ranks fouth at $3,960 per 100,00 value. Its school system is ranked on peg lower than East Cleveland this year near the bottom of the bottom third. It also ranks lower than East Cleveland in safety stats.

Maple Hts ranks fifth at $3,710 per 100,000 value. Its joins Garfield, Euclid, Richmond Hts, Warrensville Hts , East Cleveland, Lorain and Elyria at the bottom of all three ratings.

South Euclid ranks sixth at $3,500 per 100,000 value. It shares a school system with Lyndhurst ranked ninth at $3,270 per 100,000 values. Their school rankings and safety stats are also in the bottom third.

Euclid ranks seventh at $3,410 per 100,000 value. It’s school system ranked dead last in the report and it’s safety stats were in the lower end of the bottom third.

Olmsted Twp ranked eighth at $3,300 per 100,000 value. It’s school system and safety ratings are in the middle third. High property taxes are offset by lower city income taxes that come with living in a township.

Richmond Hts ranks tenth at $3,250 per 100,000 value. It’s school system ranks in the lower half of the bottom third and it’s safety stats are in the lower third.

East Cleveland comes in at eleven with $3,100 per 100,000 value. Long known as a community with problems, that even Cleveland refused to annex, it’s school and safety rankings are no longer the bottom.

To be fair Lakewood, Fairview Park and Olmsted Falls round out the top 15 property tax rate list.

The biggest take away of this data is that many communities with the high taxes have poor school and safety systems. This is the reason for lower purchase prices in these communities.

Our lease prohibits swimming pools, trampolines and the use of grills on a porch attached to a building.   On all properties that we provide landscape services the landscapers are instructed to report on the presence of these potential legal and financial liabilities.   The local water department prohibits separate meters in multi-family properties.   Filling a pool can result in hundreds of dollars of water and sewer charges that will probably not be reimbursed.   We post an immediate notice to correct and then 3 day notice if they do not remove the attractive nuisance.   I tell the tenants they are renters not home owners, if they want the priviledge of a pool I will help them buy a house. 

Tear down the ceiling and install 1/2 drywall.  When it's down fix any plumbing and electrical issues that become visible.    Of course you can buy a house with ceilings like this.