Posted by Teresa on October 10, 2012 under Landlord Tips | 
If you’re thinking of joining the millions of real estate investors who either make a living or add to their income by leasing property, we’ve got some basic tips for you, suggested by our clients, or based on our own experiences.
Think about your goals: Do you want to secure your retirement by creating wealth or income-producing investments? Are you in it for the short term, or the long haul? Do you want to buy property locally, or wherever the deals and returns are the most favorable? How much time and effort are you willing to put into this venture? Do you want to be a hands-on or hands-off landlord?
- Have a long-term view. Buying and flipping houses for profit is generally a thing of the past. Today’s real estate investors have a long-term plan for growing their portfolios slowly over time. They save money to build up a cash reserve, in case of emergencies. And they plan for making bigger improvements, such as painting, roof replacement and structural repairs.
- Keep it local. Sure, there are bargains to be had in Arizona, Nevada and Florida, just to name a few areas. But unless you already live in these states, it will be difficult to manage your rental property. Hiring a property manager is viable option, but it will cut into your profit. Besides, there is nothing like being able to drive past your property to check on it.
- Do the research. Find out the history of the property you’re interested in. Become familiar with the zoning laws in the town and neighborhood. Find out if there are any plans for development, road construction, or commercial building in the area around it. You don’t want to buy a property on a quiet street, only to find out that it’s been zoned for a strip mall.
- Find out what the local rental market needs. If you invest in three-bedroom, single family homes, but the demand is for one-bedroom condos, you’ll have a problem.
- Keep emotions out of the equation. Don’t fall in love with a rental property. Keep it strictly business. Figure out your costs, including mortgage payments, taxes, interest, upkeep, licensing, etc. Determine the market rent for the unit/s. And then determine if the asking price is a good deal. Don’t pay more than your monthly costs, or you’ll be losing money. That’s not the idea behind investing in real estate!
- Screen every tenant applicant. We can’t stress enough the importance of tenant screening. Too many landlords have regretted the decision to skip this important part of the process. Conducting a background and credit check on a prospective tenant is the best way to protect yourself. Make sure you know as much as possible about the person you are renting to.
Disclaimer:
The contents of this article are intended for general information purposes only, and should not be relied upon as a substitute for obtaining financial advice applicable to your situation.
Posted by Teresa on October 1, 2012 under Landlord Tenant Lawsuits, Landlord Tips |
Every experienced landlord has a horror story or two about terrible tenants. But a website based in Florida has visual proof: pictures of tenants and the destruction they leave behind.
The photos are posted on TerribleRenters.com, a site that aims to spare other landlords the trouble of renting to these folks. Each resident’s full name, along with a description of the problems he or she caused is posted, with photos of the property. Some postings include photos of the tenant.
Check out the site, and you’re going to see what countless landlords are forced to deal with when problem tenants move out:
- Crayon marks on walls.
- Burns on hardwood floors.
- Bags of garbage.
- Un-bagged garbage—piles of it.
- Tenant possessions simply left behind.
- Holes knocked through walls, leaving one room open to the next.
- Filthy carpets and linoleum.
- Rotten food left in refrigerators.
- Ovens that have never been cleaned.
- Drug paraphernalia.
- Animal feces.
- Stolen appliances and fixtures.
- Spray painted messages on walls and ceilings.
The list goes on and on. It is truly astounding to see how some people live. It’s even more shocking that they think it’s acceptable to leave such messes behind.
The typical “terrible tenant” has been evicted for non-payment of rent, not for damaging the property—so landlords face a double-whammy: loss of rent, plus the expenses of cleaning up garbage and property, expensive repairs and replacing stolen items.
TerribleRenters.com is based in Florida and most of the submissions are Florida residents, but some are from other states. Landlords post anonymously. Some are looking for their tenants to serve them notice or to file charges. Others just want to warn landlords not to lease to these problem tenants.
The best way to avoid problem tenants is to conduct thorough tenant screening. And it doesn’t hurt to Google the names on the application. Who knows? Maybe your applicants are listed on a terrible tenants site somewhere!
Posted by Teresa on September 28, 2012 under Landlord Tips |
Good communication is one of the most important aspects of running a successful business. Whether you’re dealing with customers, employees, partners or vendors, clear and effective communication affects just about everything else.
In the landlord business, your customers are your tenants, and it’s vitally important to keep your communication as effective as possible. Not only does great communication improve everyone’s day, but it can keep the headaches to a minimum—and even keep you out of legal trouble.
Here are 7 tips to improve tenant communication:
- Be a good listener. Everyone wants to be heard. By focusing on what your tenants are saying to you, you’ll be better prepared to respond appropriately. Give them time to express their needs, wants and feelings, instead of simply sharing yours.
- Recognize different communication styles. Some tenants speak quickly and want quick resolutions. So, get right to the point. Others want more details and background, so give them more explanations. Some don’t want to know you as a person, and are happy to have a text-only relationship, while others want to connect with you. Take a little time to learn about tenants, and you’ll figure out their style.
- Share expectations. Be very clear about what you expect and need from your tenants. None of your tenants are mind readers, so if you want them to change their behavior, let them know.
- Make it collaborative. Say “I need you to help me with this,” or “how can we work together to make this happen?” Let tenants know you’re willing to try to give them what they want, but let them know what you need in return.
- Be polite. Say “good morning.” Call tenants “ma’am” and “sir.” Ask tenants if you can come in—even if it’s a scheduled maintenance visit. If their child is screaming, ask if it would be better for you to come back later.
- Be respectful. Treat each tenant with the same respect you give your lawyer, banker or your grandmother. Even if they’re giving you a hard time, you’ll gain far more in return when you treat tenants with respect and dignity.
- Don’t get emotional. Sometimes things get heated, but if you keep a cool head and remain professional, you’ll have a better chance of diffusing the situation and solving the problem.
Adapting to tenants’ communication styles, being polite and respectful, and sharing expectations will improve your tenant relationships. Better communication can lead to less stress, fewer tenant turnovers and better profits, too!
Start your tenant relationship off right by knowing who you’re leasing to. Protect your rental property and assets with tenant background checks. Proper tenant screening will ensure you are leasing to the best possible tenants.
Posted by Teresa on September 26, 2012 under Landlord Tips |
Have you ever had an idea tenant? Would you be able to spot another one if he or she submitted a rental application? Keep in mind we’re not talking literally here. Appearances mean nothing when it comes to judging who is an ideal tenant. And, choosing tenants based on appearances can get you in legal trouble.
Rather, the following qualities and attributes make a tenant “ideal”:
- Ideal tenants have a rental resume, including references from previous landlords.
- They know how much rent they can afford.
- They don’t waste your time— they show up on time.
- They know their credit score, and are ready to explain any issues.
- Ideal tenants have saved up enough cash to cover the security deposit and first month’s rent, along with application fees, tenant screening fees, pet deposits and utilities deposits. Even better? They have several month’s rent in the bank—and the bank statements to back them up.
- Speaking of pets, ideal tenants don’t pretend to not have a cat, bird or dog. They don’t apply for rental units that don’t allow pets, and then try to sneak one in when you’re not looking.
- If pets are allowed, ideal tenants also have references from previous landlords for their pets.
- They fill out the lease application thoroughly and truthfully.
- Ideal tenants know that appearances do matter. Again, you cannot discriminate against an applicant based on race, religion, gender, family status and other factors. And plenty of landlords can tell you that tenants who look rough around the edges are often hard-working people who always pay their rent on time, while flashy dressers may live above their means and have credit problems. That said, applicants who take the time to dress nicely demonstrate respect and just might take good care of your property.
- Ideal tenants are excited about your rental property and look forward to making it their home.
Posted by Teresa on September 11, 2012 under Landlord Tips |
The Department of Housing and Urban Development (HUD) provides housing assistance to families with children, the disabled and elderly, through the Housing Choice Voucher Program. The program is commonly known as “Section 8.” To qualify for Section 8, participants must meet certain income requirements. In general, the family’s income cannot exceed 50% of the median income for the county or city in which they live.
The tenant is then allowed to find a suitable housing unit; therefore, Section 8 Housing can be found in most neighborhoods, in most U.S. cities. Landlords may agree to rent their property under the terms of the program. Their rental properties must meet minimum standards of health and safety, and the rent must be reasonable when compared to market rents for similar units.
A family with a voucher is generally required to pay 30% of its income for utilities and rent, while the voucher takes care of the remainder, up to a set limit.
Some Section 8 vouchers are for specific housing, but most give the tenant the ability to choose where to live, with the landlord’s cooperation. Landlords have the benefit of receiving rent by the third of each month from HUD. Tenants must also pay their share on time, or face the possible loss of their eligibility.
Keep in mind that HUD does not conduct tenant screening or qualify tenants in any other way. Landlords must still do their due diligence and perform background checks, credit checks and criminal history checks, as they would on any other prospective tenant.
The voucher program has been shown to be very cost-effective, as well as to positively impact homelessness and housing instability for children. Families who are able to move to better neighborhoods often enjoy better schools and higher chances for employment.
No matter who pays the rent, you need to protect your rental property and assets with tenant background checks. Proper tenant screening will ensure you are leasing to the best possible tenants.
Posted by Teresa on August 24, 2012 under Landlord Tips, Lease and Rental Agreements, Tenant Screening & Background Checks |
Most experienced landlords will tell you that tenant screening is the most important aspect of renting property. Failing to screen prospective tenants causes more problems than just about anything else. After all, each tenant is a potential liability to a landlord.
Thoroughly checking up on tenants’ identification, credit history, criminal background, work history and previous rental situations can give you a clear picture of the tenant you are about to trust to live with your property and among your other tenants.
Here are some basic tenant screening tips from real landlords:
- Don’t skip the tenant screening process, no matter how nice or trustworthy a prospective tenant seems.
- Treating each applicant equally will help you stay within the law. This is another good reason to screen every tenant.
- Look at credit history, criminal history, evictions, judgments, bankruptcies and sex offender status.
- Fake IDs are easy to buy or make, so check the applicant’s Social Security Number and identity to be sure they are who they say they are.
- If the applicant is local, drive by their current address to see how they live. Is there a beater car parked in the yard? Garbage strewn about? Or is it neat and clean? How it looks is a good indicator of how they will treat your property.
- Don’t judge a prospective tenant by his or her clothing, car or jewelry. A hard working, honest tenant could be dressed in dirty work clothes, while a flashy car and fancy watch could indicate someone who has plenty of money, or is simply living above his or her means.
- Beware of tenants who want to move in fast and have plenty of cash to cover rent and the security deposit. Take your time and conduct your screening process.
- Talk to previous landlords. If a tenant specifically asks you not to contact the current landlord, find out why, and talk to former landlords. Conduct the rest of your screening process and if the tenant is approved, let him or her know, and then contact the current landlord.
- Don’t base your entire approval on the landlord’s reference. Some will be anxious to get rid of a bad tenant (and give a good reference). Others will be honest.
- Take notice if the prospective tenant is late for appointments without apology or is unhappy about paying an application or screening fee.
- Ask why they’re moving.
Using these tips, along with a professional tenant screening service, can help insure that you lease only to qualified tenants. Good luck!
Posted by Teresa on August 21, 2012 under Landlord Tips, Lease and Rental Agreements |
Across the country, college students are gearing up for a new school year. That means securing housing, and for many of these kids, campus housing is not an option. Whether their school is short on housing, their parents are looking for ways to save from ever-rising room and board fees or they simply prefer to live off campus, they’ll choose renting a house or an apartment.
For landlords, student tenants can be lucrative. Many college towns have limited housing available, so vacancy is rarely a problem, and getting market rent—or above—is not unusual. In addition, mom and dad are often paying the rent, so that’s not a problem, either.
On the other hand, student tenants don’t always work out. Some are on their own for the first time and don’t yet realize the impact their actions have on others. Others don’t have mom and dad to back them up, so paying rent on time could be a problem. Students can be noisy, messy, and disrespectful of you, your property and the neighbors. They may not understand the terms of the lease or think that certain rules actually apply to them.
In other words, student tenants are just like the rest of the population. Some are good, some are not so good. So is it worth the hassle to rent to students? Many landlords say “yes!” Renting to students can be a sound business decision when approached from a business standpoint, with firm management, enforcement of the terms of the lease, as well as your rules and regulations.
Ten Tips For Renting to Students
- Never rent without a lease. Go into more detail than you think you need, and review it with your prospective tenants.
- When setting rents and security deposits, take into consideration the potential for higher repair and maintenance costs.
- Get each student tenant’s parent to co-sign the lease, making them responsible for late rent, damages, etc.
- Reinforce to student tenants that unauthorized guests or roommates are not allowed. Each occupant must be on the lease.
- Screen each potential tenant. Even though the students may be young, they could have criminal histories or be a poor credit risk. Tenant screening is a must.
- Determine whether your lease will run for 12 months or for the school year, which could be fewer then 12.
- Be sure the lease states that all tenants are responsible for the entire rent. If one student moves out, his or her share is still due and payable by the remaining tenants.
- Offer online rent payment for the convenience of your tenants and fewer hassles for you.
- Contact the parents or co-signers at the first sign of trouble, whether it’s property damage, noise problems or late rent.
- Enforce your rules. When students know what to expect from you, as well as the consequences of their actions, they are more likely to behave.
Posted by Teresa on August 17, 2012 under Landlord Tips |
Landlords and property managers often repaint rental housing walls and ceilings between tenants. Others have carpets professionally cleaned. Many do both. But is there an obligation for landlords to perform this maintenance?
According to our clients, some tenants think there is. However, that’s just not true. There are no laws or regulations regarding how often rental property owners must clean carpets, paint walls, replace appliances, fix ceiling fans or do any other type of cosmetic upgrades.
Smart landlords know that a fresh coat of paint and clean carpets will go a long way toward attracting quality new tenants. Who wants to live in a house or apartment with scuffed-up walls, chipped paint, dirty carpets or broken blinds?
Investing a few hundred dollars in new paint and carpet cleaning is an investment in your property, not an expense you might convince yourself you can’t afford. And remember, if the carpet is not in the same condition as when the tenant moved in, you may deduct cleaning expenses from the security deposit.
What about long-term tenants? Are they required to clean carpets, or is that a service landlords should provide? Tenants are required to keep rental properties in good condition, and that includes keeping things clean. But offering to clean carpets for long-term tenants is a smart move—it makes them happy, and helps the carpet last longer.
Posted by Teresa on August 2, 2012 under Eviction, Landlord Tips, Tenant Credit Checks |
Experienced landlords know that being tough is an important part of their job descriptions. With the economy still suffering and unemployment still high, many prospective tenants’ credit scores have taken a beating. But should landlords take into consideration the difficult economic circumstances of many American families when deciding whether or not to approve a lease application?
In other words, should landlords overlook lower credit scores or bankruptcy filings and try to help lease applicants?
Certainly, every situation is different. Many landlords will not budge on their credit requirements. Others look at the whole picture, and will pass a less-than-stellar credit score if the tenant has a steady paycheck that more than covers rent and other living expenses. Still others check prior evictions, and if there are none, then they will take a chance on the tenant.
And then there are the landlords who aren’t tough enough to say “no” to a prospective tenant with a poor credit history and no steady job. Whether they feel a sense of obligation or feel sorry for the tenant, they sign the lease and hope for the best. Often, they end up losing money, can’t get rid of the tenants and rack up thousands of dollars in eviction fees.
Trying to help people is noble, but it’s not a landlord’s job. A landlord’s job is to provide safe housing, to protect other tenants from potential harm, and to earn a profit from leasing property. You may hear sad stories of job loss, divorce, illness, death of loved ones and tough times. There is no doubt that it’s difficult to make a decent life for a family these days, when good jobs are hard to find.
Nobody wants to see a family out on the streets. But landlords have to be tough to protect themselves and their sizable investment. Checking tenant credit histories, conducting background checks, and sticking to your minimum qualifications will keep your rental property business strong and sustainable into the future. If you’re not tough enough, you may not have a future in the landlording business.
Posted by Teresa on July 27, 2012 under Landlord Tips, Tenant Credit Checks |
With a still-slow economy and high unemployment rate, the face of today’s renter is changing. No longer just young people starting out in life, more middle-aged and older folks are now renting homes than ever before. Some are choosing renting over homeownership. Others are former homeowners who have no choice but to rent.
Here are some tips for a successful relationship with today’s tenants:
- Be patient with potential tenants. Some may have been forced to sell a dream home, or have lost their home to foreclosure. They may have never rented a home before. Clearly explain your application process, review the lease carefully, and be sure to point out any rules and regulations you’ll want them to follow.
- Be sure to run tenant credit checks on every applicant. Many potential renters are facing bad credit scores, and could be high risks. However, higher deposits and co-signers can help ease the risk of leasing to them, as long as they otherwise qualify per your requirements.
- Ask prospective tenants for pay stubs from their current job, a reference from a landlord or work supervisor, and other proof that they are stable and employed.
- Consider giving a little leeway on painting or planting flowers. Former homeowners often take great pride in their living spaces, and are accustomed to maintaining and upgrading them. Why not allow them to paint (with approval on the colors, of course) or spruce up the exterior of your property?
Displaced homeowners may turn out to be great tenants. They may be ready to stay in your rental property long term, since buying another home might be a long way off. Work with them, and you could have a mutually beneficial, long-term relationship.
If you’re thinking of joining the millions of real estate investors who either make a living or add to their income by leasing property, we’ve got some basic tips for you, suggested by our clients, or based on our own experiences.
