Landlords and tenants: What advice do you have for an up and coming landlord?

[Arkitech]

Next month I'll be taking the plunge and purchasing my first multi-unit building. I've done some research on the area of landlording but as they say "experience is the best teacher".

So for those of you who have rented out to others before what would you say is the worst aspect of landlording?

How do you deal with people who don't pay or are slow with the rent?

On average what would you say the condition of your property is like once a tenant leaves?


To kind of flip it around here are few questions for tenants.

Does it take a long time for your landlord to take care of problems that arise within your apartment?

If a landlord offered free cable or other amneties (sp?) would you be more inclined to move into a slightly less attractive apartment?

What would you like to see a landlord do more of in the future? (rent reductions for early payments, cleaner buildings, quicker response to apartment issues, etc..)



Thanks for any input

 

[axelfox]

that guy that's living with two girls? He's not really gay

 

[PsychoAndy]

for the first three questions, i will suggest you speak with a lawyer. they can tell you all the wonderful options in the eviction process.

as for renting, i'll leave that to the concensus of ATOT

 

[AZGamer]

I've read books about that, and it sounds like a relatively stable financial investment. Once I get established with whatever I do in life (I'm in HS right now), I would like to do this.

A couple suggestions (my dad used to do this before he lost all patience with society and cashed out)....

No matter how right you are, avoid taking anything to court.

Evictions suck if the tenant refuses to comply, see the above. Unless there is a serious problem that devaluse the property or causes danger or harm to someone, don't even think about forcing any change.

Also, make friends with an attorney - you may need him later.

 

[iamwiz82]

i currently rent an apartment and can say my landlords are pleasant. it is family owned and operated, but they are understaffed. They are currently painting the buildings which is taking more than a month per since there are only 2 people painting. Repair time is slow, also.

I would consider moving into an apt. that paid for cable.

EDIT: i forgot to add, be somewhat selective when getting tenants. The ones(2 girls) who moved in across from us now have a dog(no dogs allowed) and have more boyfriend go in and out than you could shake a stick at. ugh...

 

[Vic]

Allow small pets. I volunteer occasionally at a local private cat rescue. The #1 reason the animals were dropped off? "Moving, new building does not allow."

Re-invest back into your building for upkeep. Out-source maintenence as necessary. Keep the place nice even if you lose a little money in the short term.

Charge appropriate yet slightly high deposits upon move-in and insist on 6 month leases. Screen prospective tenants and only rent to those with good credit and steady employment. Don't allow Section 8. This will keep the riff-raff out of your building, keep it clean, encourage tenants to leave a clean apartment at move-out, and lower your eviction rate. If you do have to evict a non-paying tenant, follow your state laws to the letter, and do not give any extra. Invariably the reward a landlord receives for being kind enough to let a non-paying tenant stay another week is a trashed apartment.

Free services, like cable, are nice but not necessary. It's more important that services like that are available at all than whether or not they are free.

If you're going to be a non-occupant landlord, look into hiring a good property management firm.

Congrats and good luck.

 

[Ameesh]

my parents put a clause into the lease saying that the renters will get charged $50 extra for every day they are late with the rent. as far as i know they have never had to enforce it.

 

[Mill]

Originally posted by: Ameesh
my parents put a clause into the lease saying that the renters will get charged $50 extra for every day they are late with the rent. as far as i know they have never had to enforce it.

That or have a 10% late fee. My apartment's rent is due on the 1st but you are not charged late until the afternoon of the third.

 

[Thegonagle]

Here's some stuff I would do if I bought a building.

[*]Fix stuff quickly. Have an answering machine for the "maintenance line." If you can't get to something right away, COMMUNICATE!
[*]Make sure all locks and latches work reliably.
[*]Consider getting the security doors keyed with double-cut, high security keys that your average hardware store can't copy. Charge $100-150 for a lost key, NO EXCEPTIONS! This will keep people who you have not personally approved from moving in off-lease.
[*]Keep the building and laundry room clean.
[*]You might want to consider a laundry service that owns, maintains, and collects from the machines.
[*]Keep the yard manicured and reasonably free of weeds. If you have a tenant that enjoys gardening, give a discount on the rent during the summer and buy flowers and plants for the property. It will pay you back by letting you charge more for the other apartments.
[*]Don't offer free cable TV. Spend the money to make the apartment more attractive. You can ask for more rent for a better apartment. Cable TV would be wasted on the 50% of your tenants who would never subscribe anyway.
[*]Don't make your tenants mail you a rent check or bring their rent to a different location if you're not living in the building. Install a lock box in a secure area of the building where tenants can drop their checks.
[*]Install a bike rack in the basement or laundry room.

 

[Draknor]

Garfang has some great suggestions! Just to add my .02... (I'm currently a renter).

1. For my apt, basic cable is included, and it's nice, but it was not a deciding factor, and I probably wouldn't have ordered it otherwise. Internet, however - not included, but I'm gladly shelling out $40/mo for it. Make friends with a local ISP, and get a T1 to the apartment building

2. Bike rack is a must (IMHO).

3. If packages are delivered to the office, make sure the office keeps good hours so full-timers have time to pick up their packages (the office in my building is open 9-7, Mon-Thurs, and other hours on Friday & the weekend that I don't remember).

4. Nice, clean building is a must. I don't care about spotless, but it should have a nice, clean appearence. Well-kept, lighted hallways, no trash laying around, walls looking etc, etc.

5. Be friendly & neighborly with your tenants - it scores big points

6. A nice little gesture is putting some sample/trial sizes of common items in the apartment before new tenants move in. ie dish-washing soap, shampoo, soap bar, roll of TP, box of kleenex, etc. Again, scores big points with tenants

7. Most importantly, as already mentioned, communicate!! Like most people, if I know what's going on, I'll be much less angry about something taking longer than if I'm kept in the dark (and/or fed.. well, you know )
Good luck!

 

[RbSX]

Make them do a damage downpayment, I know some people make the tenants make a downpayment so they will be less motivated to rip your place apart.

 

[Hooobi]

L/T law varies widely from state to state, so I'd be sure to confirm any legal advice with a local lawyer.

However, I would avoid lawyers and courts as much as possible, it's usually an extra expense that you won't be able to recover from a tenant.

Also, be sure you have a well-written lease that specificies the duties/rights of all parties involved. Especially with regard to any policies you might want to invoke later, such as late fees, pets, etc.

Also, make sure that any time you waive a provision in the lease (such as accept rent 5 days late) you follow it up in writing with a note to the T stating that by accepting late payment, etc this time, you are not waiving that right under the lease, etc. etc.

Always a good idea, in a large multi-family environment, to follow up on everything in writing, just to cover your ass.

If it's something smaller, like a duplex, I've seen Landlords be a bit more relaxed about stuff because it's more of a personal relationship.

You'll have to decide what you're comfortable with.

 

[PsychoAndy]

Originally posted by: Ameesh
my parents put a clause into the lease saying that the renters will get charged $50 extra for every day they are late with the rent. as far as i know they have never had to enforce it.

Depending on the monthly rent, the percentage that is charged may be illegal and classified as usury. check state laws as to what is permitted and what is not.

 

[Arkitech]

up

 

[MichaelD]

Hi Arkitech,

Congrats on taking the plunge; something I hope to do someday. If you do it right, it can be a cash cow, as I have several friends that rent out houses as well as one guy who has a small (8-apt) apartment building.

I'm speaking as:

1. An "older person" (34 y.o., not some college kid)
2. A renter, as I currently rent an apt

My Suggestions:


1. Even if the building is not in the best of areas, DO NOT rent to Section 8! The guaranteed market-rate rent check might look attractive at first, but you will pay for it dearly in trashed apartments, roaches, ants and mice and really upset tenants b/c the 16 y.o. single mother of five that lives in apt 344 has guys coming and going at all hours...and smoking weed in the hallway.

2. This may strike a nerve w/most on this board, but tough noogies. Don't rent to anyone under 25 years of age; the maturity to be a responsible, CONSIDERATE of others that live around you is usually not there at that age. It wasn't when I was 25.

That is not an arbitrary number pulled out of my butt. By 25, most are out of college, done with stumble home drunk party scene and are working 40 hours a week in a respectable job. And paying rent on time. Not saying that you can't have a 40 year old slacker bum slob, but the chances are less.

3. Be selective about who you rent to. That "equal opportunity" crap is just that; crap. It's your place. If you say "sorry, no vacanices" even if half the building is emtpy, then guess what? There are NO VACANCIES, pal..try down the street somewhere.

4. Look for stable employment history. Someone who can only produce paystubs from the past month will probably lose his current job within a month. If it comes down to "pay the rent or buy food" most prolly, they will buy food.

5. Definitely try to rent an apartment to a police officer...maybe at a small discount for being a "city employee." If people know there's a cop in apt 555, they are less likely to screw around and it will also keep the riff raff out of your building.

6. Along those lines, maybe offer a small monthly discount for city employees, active duty military and the like. Stable jobs, guaranteed (in most cases) rent payments and good, clean upstanding people.

7. Free cable is not important. I mean, if you have "a hookup" and can get your entire building wired for basic cable and only pay $100 a month out of your pocket, then yeah, go for it, but i"d rather see new paint on the walls and shiny appliances.

 

[Gibson486]

<<So for those of you who have rented out to others before what would you say is the worst aspect of landlording?>>

----getting calls when you do not want them and keeping up with tenant complaints.

<<How do you deal with people who don't pay or are slow with the rent?>>

----You cannot be a softy on this spot. You have to say pay or get out. The buck has to stop somewhere.

<<On average what would you say the condition of your property is like once a tenant leaves?>>

---My mom does low income aprtments and every time a tenant left, the place would be an absolute mess. If there are hard wood floors, expect them to be scratched.

Landlording is not a very easy business. It's very hard to keep up especially if the tenants are a**holes and complain about every little thing. Just rememebr not to cut back on where it really counts, because you will regret it. oh, and another thing, if your building is damaged by fire, prepare to handle claims about you being a neglagent landlord.

 

[Arkitech]

Anyone here have any thoughts on property managers? More than likely I will be working with one, my current job won't allow me to invest a lot of time in caring for tenants and I also plan to purchase quite a few buildings. So my best bet is going to be a property management company.

My biggest concerns though, are that I find a company who won't overcharge me for basic repairs and maintenance and other fees. Also I hope to find a company who assumes responsibility for their work. For example if they screw up a tenants property I don't want to be the one targetted in the law suit. I guess I'll need some good insurance now that I think about it.

 

[MichaelD]

Originally posted by: Arkitech
Anyone here have any thoughts on property managers? More than likely I will be working with one, my current job won't allow me to invest a lot of time in caring for tenants and I also plan to purchase quite a few buildings. So my best bet is going to be a property management company.

My biggest concerns though, are that I find a company who won't overcharge me for basic repairs and maintenance and other fees. Also I hope to find a company who assumes responsibility for their work. For example if they screw up a tenants property I don't want to be the one targetted in the law suit. I guess I'll need some good insurance now that I think about it.

Yessir. And another thing. I would consult with a lawyer who specializes in property/lease law. Find out about your liabilities if you go with a property mgmt company etc. Whatever the consult would cost you is a pittance compared to the money in fees/suits you'd potentially be paying. Just a thought. Good luck.

 

[Turin39789]

what city is the property in? can I get a hot deal?

 

[bjc112]

All i have to say is, Try and be helpful, don' t be a total @$$... my friends Landlord is a the biggest pain, alomost enough to make them move... .On the other hand my dad owns property up the street, he is pretty good with them so it works out...

I say get on a good relation ship with the tenants.... Then you have 0 probs...

 

[tcsenter]

As you can see, you're getting some advice from people as TENANTS (hook up a T1 and cable, give us pets, etc.), not as landlords. Don't listen to them. You're going to be landlord, where nothing you do will be good enough for many people and you're always perceived as 'The Evil Slum Lord' who owes them an apartment whether they can pay for it or not.

First, understand the tenant/landlord laws in your state and county. Understand that in most areas of the country, these laws and judges administering them tend to favor tenants, not landlords. You want to know exactly where you stand, legally, at all times, in all situations. If you have to go to court, you do not want to give the judge anything that could possibly be used to your detriment and the tenant's benefit. If you have to go to court, you want to be able show that legally the tenant has no leg to stand on and you're on firm ground. Even then, judges have been known to side with tenants.

Second, join your state or county landlord association. This will be a great resource for you as a landlord.

Third, purchase your property and run your business under a limited liability corporation, or transfer to a LLC as soon as you can. As a first time income property owner, there is a fair chance that you will fail, for any number of reasons. If you go bankrupt, or are sued for whatever reason (drunk tenant trips on the sidewalk), you do not want them coming after your personal assets. The only way to insulate yourself from a bankruptcy or lawsuit is to incorporate.

Fourth, you are The Evil Slum Lord, don't forget it. If you do not look out for your interests, nobody else will, certainly not your tenants - they'll try to rob you blind if you give them half a chance. Do not get all sappy and cave-in to somone's sob story and excuses. People will say anything to take advantage of any ounce of compassion you might have and they will screw you hard with it every time. Write and disclose a fair tenant policy that does not run afoul of the law, ENFORCE it, and NEVER make any apologies for having to protect your interests.

Fifth, do periodic inspections of people's apartment for maintenance. Yes you can do this as long as its disclosed, you give reasonable prior notice, and your stated purpose is 'maintenance' (leaking fixtures, fire hazards, smoke detector is working, damage to apartment, etc.). Of course, you're looking for other stuff, too, such as someone who does not clean their apartment (refuse and garbage promotes vermin, insects, and poses a fire hazard).

Six, hold up your end of the bargain and legal responsibilities as a landlord. Fix things in a reasonable amount of time and make yourself or your representative available for complaints during certain hours. You do this to protect yourself, not because its in the interests of your tenants. Try to communicate in writing as much as you can, keep copies of all correspondence and notices you might send - every single one. If you have a conversation with a tenant about any subject matter other than a personal nature, make notes describing the time, date, place, what the conversation was about and who said what.

Seventh, did I mention you're The Evil Slum Lord? Yeah, so be prepared to get screwed. The further you go out on a limb for someone, the harder you'll get screwed. You're not running a charity or homeless shelter, never forget that.

 

[Jzero]

Being a landlord is great except for the tennants. It's too bad landlording kind of requires tennants in order to be successful.

Anyway, I've never been a landlord, but they have had their share of good and bad renters in my parent's condo complex, and it's a real pain sometimes. They also deal a lot with them just in their neverending quest for the magic "House within walking distance of the beach that has 3 BR, 2 Baths and they can actually afford" and in NJ the rules are VERY VERY tennant-friendly. They can squat in your property for MONTHS without paying you a dime and you won't be able to get rid of them.

So as MichaelD said, be careful whom you rent to.

OTOH, as a 21 year old fresh out of college, I'm glad my landlord was willing to take a chance on me, and I like to think she's glad she did. I've never once called to complain...

Also, as was already said, make sure the rules are 1)legal, 2)fair, 3) enforced.

 

[silverpig]

Lemme stay there for free and I'll give you all the free feedback you want

 

[amnesiac]

Hey Arkitech,

Congratulations on making the plunge! Property Management is a big responsibility and takes a while to see a good return, but worth it in the end.
A couple hints from a property owner/landlord:

- Join your local Apartment Owner's Association. They have resources and contacts which will inevitably prove invaluable to you.

- Read up and stay caught up on any property / tenant laws relevant to your state and county. Knowing the law and staying a step ahead of the tenant is mandatory in case of a dispute.

- Screen your renters carefully. In CA we can charge people $20 for a credit check before we look at their application. You'd be surprised how many people try to rent with horrible credit. That's more of a headache than you need.

- Make arrangements with the following: Handyman, plumber, contractor, pest control, gardener, trash hauler, etc. Having repeat business with them will eventually result in reduced costs, and it prevents tenants from using "their guy" to do any work. It's always a bad idea to let tenants provide for their own repairs.

- Keep tabs on rental prices in the area. Stay competitive but make sure you charge enough to cover overhead + monthly payments.

- Organization is key. If you do not have an organized record of EVERYTHING you and your tenants do and say it can always be used against you. Keep receipts, logs, etc.

- Retain a good lawyer. You WILL get sued eventually by some unruly tenant for some ridiculous reason.

- Do a thorough walkthrough with tenants before and after move in/move out. Carefully log all complaints, damage, etc. Take pictures. People don't like not getting all of their security deposit back.

That's all I can think of for now. This has been CC'd to your PM box as well. I'll let you know if I thnk of more.


Steve
amnesiac 2.0

 

[Fritoz]

Some great tips have already been given, so I'll just reiterate a few I firmly believe in as a landlord myself.

The best way to save yourself headaches down the road is to do your homework up front, and only rent to qualified, quality people. You must have the attitude that you'll let the property sit empty, rather than just get a warm body in there. Stick by your guns, I've had the same high-quality tenant for more than three years because I waited until the right person applied. Remember you are allowed to discriminate -- against Non-Paying-BUMS!

Do a thorough background check (personal, legal, and employment history), housing history for past three years (how come they don't show an address from 12/99-6/01? Were they in prison???) , and a credit check.

Above all else, verifiable employment and credit checks are a must (run a check yourself, or have them do one and bring you the report). As my dad always says, "Credit is character." If someone can't pay off Crazy Larry's Rent-to-Own store for the vinyl furniture they bought last year, how do they expect to pay you for the privilege of living in your property?

NO PETS. Yeah, I know, little Muffie is completely housebroken and absolutely adores everyone who comes into contact with her. Meanwhile, you're replacing carpets every other year, and oh by the way -- here's a summons from the neighbor who got bit, and is now suing you! After all, landlords have deep pockets, right???

Above all else, be honest, compassionate, and fair with your tenants. But let them know that just because you're a "nice guy", doesn't mean this isn't a business deal. They have entered into a legal contract, agreeing to pay you a sum of money for the privilege of living in your property for a certain amount of time. On time payment of the rent must be the #1 priority in their budget. In return, you'll be the best landlord they have ever had. You'll keep the property in excellent livable condition. When they need repairs, you'll have someone out there ASAFP.

Anyway, good luck! This can be a rewarding, and frustrating financial endeavor, but I think the benefits are really worth the effort in the end!