How to Screen New / Potential Tenants

0 | September 24th, 2008 | Posted in Step #4: Rent

Getting good tenants are not in the destiny of every landlord. If you, as a landlord, looking for a good tenant for your rental property then here are some useful techniques to follow.

The first step for the landlords to know the background of the tenant is the documents forwarded to him by the tenant. If something wrong is found in the application, you as a Landlord should immediately reject it.
Ask each applicant for at least 3 personal and 3 professional references in order to do a sufficient background check.  Also, make sure that the picture on the driver’s license matches the person in front of you (this can be done when you show a home to a prospect).

Check out his current bills like does he have a loan payment or any other payment. Moreover, the landlord should know about the reason why the tenant is leaving his current living renting place. If you do not get satisfactory reply, then contact with his previous landlord directly.

Checking out the credit history of the tenant is also not a bad technique to opt for as it will show the credit ability picture of the tenant in a clear cut way.

Armed with all this information, you will not find any trouble to find a good tenant for your renting apartment. You should always remember one thing that the more time and hard work you put in before giving shelter to the tenant, the less problem you will experience in future.

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Free Landlord Handbook (Illinois based)

0 | September 17th, 2008 | Posted in Uncategorized

I recently came across a free handbook for Landlords.  While it is written for Illinois law, the recommendations within are relevant (and mostly applicable) to all landlords).  I recommend you check it out.  Here is the LINK.

All the best!

Move-out day Tactics (3 approaches…)

0 | September 17th, 2008 | Posted in Uncategorized

Today, I received the following e-mail from a reader:

…dig your web site.  any advice on how to make sure tenants move their
stuff out very promptly on changeover day?  their lease expires at
midnight on 8/31, but i’m going to let them walk out the door the next
morning.  what kind of penalty or threat do you impose for tenants
that are not packed up and end up moving out late in day instead of
first thing in the morning?”

Great question (and one I’ve dealt with in many different ways…).  Here is some suggestions that my fellow landlords may wish to consider:

(1) The “Good Guy” Approach:

I’ve gone so far as to pay one of my “handymen” with a truck $50-$75 for 2-3 hours of his time (ie. $25/hr cash) to help the tenant move out (as most of my tenants stay in the area anyways).  I tell the tenant that if they want help, then they have to have everything boxed up and ready to go by 10 am on “moving day”.  I also tell the tenant that the property must be “swept clean” upon move-out in order to take advantage of this special offer…

(2) The “Tough Guy” Approach:

I’ve sent letters to tenants warning them that if they move out “late”, I will be deducting $$$ from their security deposit at a rate of 150% of the daily rent, starting 1 minute past midnight.  I am able to do this because I add a clause to all my leases that reads:

23. HOLDING OVER. If Tenant holds over beyond the Expiration Date, even if only for one (1) day, and if Landlord accepts Tenant’s tender of rent, which rent shall be in the amount of 150% of the monthly rent reserved under this Lease, then the tenancy shall continue from month to month in the absence of a written agreement to the contrary, subject to the same terms, conditions, rights, rules and obligations set forth in this Lease. If tenancy is on a month to month basis, Landlord may increase rent upon thirty (30) days written notice. Landlord shall not be obligated to enter into a new lease with Tenant or agree to a continuation of possession on a month-to-month basis.

Note that I do not try to upset the tenant too much, since I would rather them move out “late” than cause unwanted damage to my rental property.

(3) The “Typical” Approach:

Typically, I contact my tenants who are moving out the day before, and set a time for us to meet in order to do a “walk-thru”.  I bring the Move-in/Move-out Checklist, and fill it out (with my tenant), so that there are no disagreements if / when I make deductions from the Security Deposit.   If the tenant is not moved out on time or chooses not to meet with me, then I use my own “best judgment” when inspecting my home (and I ALWAYS take pictures of damage).  Needless to say, damage is NOT normal wear and tear, like dirty walls, for example.  The cost of cleaning a home (like dirty walls) will never hold up in court…

Luke, I hope this helps!  Drop me a line anytime you have a question, and don’t forget to subscribe to my website at www.TheRichSlumlord.com to get Free Tips and other “Stuff” when I send it out to my subscribers!

Good Luck!

The Rich Slumlord
TheRichSlumlord@gmail.com

Getting Tenants to move out “on time”…

0 | August 11th, 2008 | Posted in Step #4: Rent, Step #5: Maintain, Step #6: Admin

Today, I received the following e-mail from a reader:

…dig your web site. any advice on how to make sure tenants move their
stuff out very promptly on changeover day? their lease expires at
midnight on 8/31, but i’m going to let them walk out the door the next
morning. what kind of penalty or threat do you impose for tenants
that are not packed up and end up moving out late in day instead of
first thing in the morning?”

Great question (and one I’ve dealt with in many different ways…). Here is some suggestions that my fellow landlords may wish to consider:

(1) The “Good Guy” Approach:

I’ve gone so far as to pay one of my “handymen” with a truck $50-$75 for 2-3 hours of his time (ie. $25/hr cash) to help the tenant move out (as most of my tenants stay in the area anyways). I tell the tenant that if they want help, then they have to have everything boxed up and ready to go by 10 am on “moving day”. I also tell the tenant that the property must be “swept clean” upon move-out in order to take advantage of this special offer…

(2) The “Tough Guy” Approach:

I’ve sent letters to tenants warning them that if they move out “late”, I will be deducting $$$ from their security deposit at a rate of 150% of the daily rent, starting 1 minute past midnight. I am able to do this because I add a clause to all my leases that reads:

23. HOLDING OVER. If Tenant holds over beyond the Expiration Date, even if only for one (1) day, and if Landlord accepts Tenant’s tender of rent, which rent shall be in the amount of 150% of the monthly rent reserved under this Lease, then the tenancy shall continue from month to month in the absence of a written agreement to the contrary, subject to the same terms, conditions, rights, rules and obligations set forth in this Lease. If tenancy is on a month to month basis, Landlord may increase rent upon thirty (30) days written notice. Landlord shall not be obligated to enter into a new lease with Tenant or agree to a continuation of possession on a month-to-month basis.

Note that I do not try to upset the tenant too much, since I would rather them move out “late” than cause unwanted damage to my rental property.

(3) The “Typical” Approach:

Typically, I contact my tenants who are moving out the day before, and set a time for us to meet in order to do a “walk-thru”. I bring the Move-in/Move-out Checklist, and fill it out (with my tenant), so that there are no disagreements if / when I make deductions from the Security Deposit. If the tenant is not moved out on time or chooses not to meet with me, then I use my own “best judgment” when inspecting my home (and I ALWAYS take pictures of damage). Needless to say, damage is NOT normal wear and tear, like dirty walls, for example. The cost of cleaning a home (like dirty walls) will never hold up in court…

Luke, I hope this helps! Drop me a line anytime you have a question, and don’t forget to subscribe to my website at www.TheRichSlumlord.com to get Free Tips and other “Stuff” when I send it out to my subscribers!

Good Luck!

The Rich Slumlord
TheRichSlumlord@gmail.com

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Rental Property Lease Agreement “Power” Clauses

0 | August 5th, 2008 | Posted in Step #1: Find, Step #3: Fix, Step #4: Rent

This was posted online by Scott Ficek, a Minnesota Real Estate Agent with RE/MAX Advantage Plus. His full contact information is provided at the end of this valuable article… Here are some extra add-in clauses that will give you extra leverage or reduce your headaches with your tenants. Feel free to cut and paste them directly into your leases: Disclaimer: I am not an attorney in your state, nor do I play one on TV. Your should seek competent, local legal advise regarding these suggested lease clauses.

  1. All drains, waste pipes, and plumbing are accepted as clear by the tenant at the time of occupancy and any material blocking them after occupancy shall be repaired by the tenant except blockages caused by roots or backups from theLease Signature street.
  2. Glass breakage is the responsibility of the tenant unless caused by landlord or nature.
  3. Leak in pipes, unless caused by negligence of tenant are to be repaired by the landlord within a reasonable time after notice, but the landlord shall not be liable for any damages resulting from such leaks and/or overflows.
  4. No signs (including political signs) shall be placed on the premises by the tenant or at the tenant’s direction without the prior written consent of the landlord.
  5. Light bulbs are the tenant’s expense and responsibility.
  6. The unit is accepted as insect, rodent, and pest free by the tenant at the time of the occupancy. Tenant is responsible for insect, rodent, and pest control. If tenant choses not to correct problem, landlord may pay for pest control and bill tenant applicable costs.
  7. Use of property for business is prohibited: The premises shall be used and occupied by the resident(s) exclusively as a private residence. Neither the premises nor any part thereof shall be used at any time during the term of this lease by the tenant for the purpose or carrying on any business, profession, or trade of any kind.
  8. No auto repairs lasting more than 1 hour may be performed on the premises nor on any city street adjacent to the property.
  9. Resident(s) agrees not to park or store a motor home, recreational vehicle, or trailer of any type on the premises without prior written consent of the landlord.
  10. Resident(s) agrees to use said dwelling as living quarters only for ____ adults and ____ children and to pay $____ for each week for any other person who shall occupy the premises as his/her living quarters.

Again, check with your local attorney about the legality of these clauses in your area. Plus some may not apply or be contrary to local rental standards/customs. While not a complete list, many of these clauses will give your investment property leases extra teeth to insure compliance from your tenants and keep your rental units is the best shape possible. Take the time to power up your leases! You will be happy you did. Scott Ficek is a Minnesota Real Estate Agent with RE/MAX Advantage Plus in Minneapolis and helps new and seasoned investors buy and own Minnesota Investment Property. Scott owns and manages almost 30 of his own investment property units from single family to multi-family. Find his website at www.minnesotainvestmentrealestate.com

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Tips for Successful and Legal Landlording (Nat’l Ass’n of Realtors)

0 | August 5th, 2008 | Posted in Step #4: Rent, Step #5: Maintain, Step #6: Admin

The April 2008 Realtor Magazine provided this article, which was posted Melissa Stanley on April 28, 2008:

The national association of Realtors just came out with a list of 7 sercrets to successful and legal landlording. #1 is my favorite: Run Renting Like a Business. This is so important whether you are renting your condo to your friend or a 15 unit building professionally. Make sure there are rules and policys that are clear and in writing. This will help you avoid misunderstanding and confusion if and when things go wrong. Even friends and family with the best intentions can fall on hard times. If they can’t pay their rent you are going to have problems and fights no matter what, but if you have some rules and policys it will help you out of a hard situation gracefully. Remember if you are ever in a dispute with a tenant (no matter who they are) you should make sure all of your correspondence is in writing.
The other 6 tips are:
#2 Treat everyone equally, espcially important when if comes to fair housing laws.
#3 Use the right forms, Chicago has pre-printed lease that are easy to get.
#4 Make your lease as specific as possible, all of my leases have a ride with specific rules for my properites.
#5 Write out a policy for defaults, you have to have written rules about when rent is due, what the late fee is, and when you will began eviction. Remember in Chicago rent is late after the 5th or later, and you can only charge a certain amount in late fees ($10 for the first $500 in rent and 5% of anything over that).
#6 Don’t treat secuirty deposits as potentail for profit, this is important you must keep security deposit money in a separete account. Security deposits can be applied to un-paid rent but only after the lease has expired or the tenant moves out, not before.
#7 Don’t be fooled by appearances, always check out tenants carefully. Con artist are succesfull because they are good at it, don’t be fooled by good looks and charm. Make sure to check out employment and past references. Run their credit is you can, you can also charge your prospective tenant a fee for the credit check.

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Are you a “hands-on” Landlord?!

0 | August 4th, 2008 | Posted in Intro: Getting Started, Step #3: Fix, Step #4: Rent, Step #5: Maintain

This is a very good (and brief) summary on the benefits of being a “hands-on” Landlord. It was written by Bruce Swedal and published on May 28th, 2008. Here is the LINK to the original posting. Article Source: http://www.212articles.com

There are some landlords that prefer the hands on approach who manage all the different aspects of their rental property from the process of renting, to rent collection and maintenance.

Do you fall into this category? To find out you should ask yourself a couple questions such as do you like to do things around the house? It usually helps if you do because this approach to being a landlord means you take a role in fixing some of the smaller issues which need repair in a rental home.

Part of what determines just how much work you will need to contribute is the type of property you purchase. Remember the things you are good at when deciding on a purchase. If you’re afraid of heights you may want to stick with ranch style homes because there may be a time when you need to go up on the roof for repairs.

Another question you should ask is just how good are you at keeping up on maintenance? If a problem comes up can you respond quickly to address it? Landlords who respond quickly are more apt to keep a good relationship with their tenants. If you’re slow to respond to tenants needs you may develop more of a bitter relationship with them. Once this perception is in place it is very difficult to dispel. If you have good social skills and address issues in a quickly the relationship with your tenants can be more positive.

A few of the advantages for this kind of landlord include not being dependent upon others for rental or maintenance issues. When something pops up you can generally address it in the time it takes others to can swing by on the way home and take care of the issue rather than working around someone else’s schedule.

You can also find it is easier to monitor your investment property. It will give you opportunities to watch for maintenance issues closer and keep track of how the tenants are taking care of your investment.

Being around more also helps you to develop a closer relationship with the tenant and make them more inclined to take better care with your home. The closer relationship also will create better feelings all around and lead to a better environment for all.

Some of the negatives of this type of landlord relationship include the time requirement on your part. If time is something you are in short supply of you may want to minimize the impact by purchasing an investment property that is not too far from your current home. Then there is the time that will be required for maintenance and repair in addition to the management issues.

Occasionally good and friendly relationships with others (including tenants) can lead people to take advantage of your good will. Take care of how situations progress and if you feel your being taken advantage of the solution would be to take a step back and treat the situation with a more business like demeanor.


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