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Good life lesson

Good “life lesson” quote from “Paps” to a young Arnold Palmer, “Hit it hard. Go find it, and hit it hard again!”

What’s your point?

man-pointing-up

What’s your point?
I had a tenant ask me to renew his lease a few days ago. I checked with the owner and the owner said that he was ok with another year renewal, but wanted to raise the rent from $1,850 per month to $1,900 per month. I called the tenant and relayed that information to him. He was upset that we were raising the rent. Then he said, “Listen, I know of two other condos in this complex that are identical to mine that just rented for $2,200 per month each!”
“Hmmmm”, I replied, “What exactly is your point?”
After a brief pause… he replied, “I guess I don’t have a point… I’m ok with $1,900 per month going forward.”

Huh… Really?

man scratching his head

I was showing a home for rent to a potential tenant.
As we were standing out front he said, “I don’t usually pay my rent on time. Right now I’m 3-months behind. As a matter of fact, after this I have to go to court for my eviction hearing. Are you going to have a problem with any of that?”
I answered, “Yes. I’m going to have a problem with that.”
He replied, “Huh… Really?… Even with me being honest about it?”
Nodding my head I answered, “Yes. Even with you being honest about it.”

Renting your residential home – Treat your tenants right

King-Henry-and-Queen-Anne

All Right! You’ve gotten some tenants, and they’ve moved in, and they paid all that was due, and they transferred the utilities into their name, and they’ve done all of that on time!!! Now what?
Think about how much time, energy, and money you have put invested into getting these awesome tenants in your rental home:
~ The decision to put it on the rental market;
~ The advertising;
~ The cool sign that you put up;
~ The getting it ready to show;
~ The phone calls;
~ The showings;
~ The no-shows;
~ More showings;
~ The weirdo’s that showed up;
~ Taking applications;
~ Checking references;
~ Preparing a lease;
~ Opening a separate bank account;
~ Collecting a deposit and first month’s rent;
~ Doing the walk-thru with the tenants;
~ Turning over the keys;
~ Walking away, looking back over your shoulder saying, “Did I do the right thing?”
Now that all of that is over, do you want to do it again in 6 months? No? Then you had better start thinking right now that these new tenants are your BEST customers and that you better do everything that you can to keep them. Keep them there, happy, safe, comfortable and loving you!
The best way to avoid confrontation is that you should set expectations for them right up front.
~ When is rent due? When do you consider it past due and what are the ramifications?
~ Who is paying what utilities, lawn maintenance, pool maintenance, and what standards you and/or they are expected to keep. Who is paying for light bulbs and smoke alarm batteries?
~ Who is going to repair what? And, what constitutes an emergency and what does not? Many tenants think almost everything is an emergency and should be dealt with within the next hour no matter what the day or time. I usually let them know up front that running water that we can’t stop, electrical sparks or fire constitute emergencies and require immediate attention. A broken sprinkler head, a dishwasher that isn’t completing a cycle, or a screen door that won’t close correctly are things that we can deal with tomorrow during normal business hours.
Having said all of that, nothing will irritate tenants faster than dragging your feet on getting maintenance items fixed. You are going to have to do it anyway, so why not do it the first day the repair request comes in?
~ Do more than expected. You are expected to collect the rent, keep their deposits safe, and make repairs within a reasonable time. I say do more. Give them a break on late rent ONCE. Make repairs today if you can. They will freak out if they come home from work and the broken window is already fixed. Buy them a little something unexpected, i.e. a Christmas door mat, a Thanksgiving turkey gift certificate, Flags in their front yard for Independence day or Veterans day.
REMEMBER, these tenants are your best customers and they are living in your property. It is a REALLY good idea to keep them happy, for lots of reasons.

Renting your residential home – Choose the correct tenants

Family
Are you about to entrust possibly your most expensive possession to someone you have met for about 15 minutes?
In 1977 I picked the perfect tenant for my home that I was keeping as a rental. By all outward appearances she (Mary) was perfect for my home. Recently divorced, 3 kids, looking for a 4-bedroom stable home to raise her kids. Mary’s finances fit our parameters. All was perfect. I purchased a fill in the blank rental agreement from a local office supply store, filled it out, and we both signed it. Mary gave me 1st month’s rent and a security deposit. She was due to move in May 1st, so I moved out April 15th and out of state.
I hadn’t heard anything from her, so I called my neighbors around May 15th and asked if all looked ok over there. My neighbors told me that no one ever moved in. About a week later I received a letter from an attorney stating that Mary had been declared incompetent and was in an institution. He demanded return of all moneys Mary had paid me. (So much for my ability to judge people back then…)
I have learned a lot since my first foray into home rental back in ’77.
Here are some recommendations:
* Setting the standards – There are many ways that you may exclude potential tenants legally, but do not violate antidiscrimination laws. The Federal Fair Housing Acts (42 U.S. Code §§ 3601-3619) prohibit discrimination on the basis of race, color, religion, national origin, gender, age, familial status (having children), and physical or mental disability (including alcoholism and past drug addiction). In addition, many states and cities also prohibit discrimination based on marital status, gender identity, and sexual orientation.
* What can you use as a basis for rejection? A landlord may reject a tenants application for poor credit history, income that a reasonable businessperson would deem insufficient to pay the rent, negative references from a previous landlord or employer, a criminal conviction, or a prior eviction lawsuit (even one that they won). As long as they don’t discriminate, landlords can basically choose whomever they want. For example, a landlord can refuse to rent to smokers or disallow pets because smokers (and pet owners) as a group are not protected by antidiscrimination laws. If your landlord’s policy is no pets, no smoking, or some other legitimate lease or rental agreement term, you’re out of luck unless you can make some convincing arguments for your case.
* It may be difficult to believe, but some people do lie on their rental applications. Do you want to start off your relationship with a tenant that lies to you on the very first item you have from them? It is very normal for me to reject an application as soon as I discover misrepresentations on it. Diligently checking their references and backgrounds also builds credibility for you with your tenants.
* Ask them about their employment, and verify what they disclose. You have a right to know if they will be able to pay the rent.
* Ask them about financial resources and run a credit check. Do they have judgments from electric companies or other utilities against them? If they won’t pay to keep their lights on, it is doubtful that they will pay you timely in the future.
* Check their criminal background. There may be items that you are willing to overlook, but I’m sure that there are criminal histories that you would reject immediately also.
* Make sure that you check the national sex offender’s database.
* Check for any previous evictions.
* Make sure that you check with at least two previous landlords. A current landlord may give you a great recommendation because they are dying to get rid of them. Two landlords ago has nothing to lose and will usually give you an honest reply.
* Ask for copies of their Social Security cards and Drivers Licenses or other form of picture ID.
* It will be difficult for you to get it later, so ask in the beginning for information that will help you find them in the future if they skip out owing you money. Siblings, Mothers and Fathers addresses and phone numbers, direct supervisors phone number at work. Friends (references) phone numbers, etc. They will willingly give you this information up front, but you are unlikely to get it later.
* Make sure you treat all applicants equally. If you apply the same standards to all that apply to rent you will probably be fine, as long as you are not discriminating against a protected class or status.
* Assuming all of the above works out, have a Florida Attorney prepare a lease for you. They will usually have the most up-to-date information and will help you to meet your legal responsibilities.
* Hold security deposits and advance rents (if any) in a Florida banking institution, not commingled with your own money.
There are many services that can help you with any or all of the above if you are willing to look for them.

Renting your residential home – Spend money where it counts

House in disrepair
Do you need to do some work on your home before it goes on the rental market? Here are some recommendations:
* Replace any rotted wood or rusted metal outside.
* Don’t go wild with landscaping, but make it look neat and well cared for. (It’s a good idea to include yard maintenance and pool maintenance as items paid for by the owner during the rental.)
* A fresh coat of paint inside and outside will do wonders toward maximizing your rent potential.
* Don’t spend a lot of money on high-end appliances, but everything should be clean and in working order.
* The kitchen and bathrooms need to be spotless.
* Any window coverings should be pretty generic. Do not spend a lot of money on expensive shades. Same with ceiling fans.
* Don’t spend a lot of money on floor coverings. They will take a lot of abuse. More renters these days are looking for homes with minimal or no carpeting. Tile is great. Hard wood is very pretty, but can get really torn up.
* Clean up the garage and consider painting the floor.

Sometimes it is difficult to treat the home as a rental. We all tend to over do decorating. We treat the place like we live there. You really need to filter your decisions through the question, “Will this increase the amount of rental income that I will receive or help me get the place rented sooner or to a better quality tenant?”

Renting your residential property – Make it appealing

Property-For-Rent

The sign is up, and the first car drives by, and you can hear the wife through the window, “Ugh! Who would rent that?”
There are lots of good reasons to put your best forward before the sign goes in the yard and your house get listed for rent on the internet.
* Nothing gets good tenants faster than good curb appeal!
* You want to begin your relationship with your new tenants on good terms, not with a list of items that need to be repaired prior to or shortly after occupancy.
* It is much easier for you to keep up with repairs as the need comes up.
* You will maximize your rent potential, both in dollars and time, if your house is in perfect condition prior to marketing it for rent.
* The condition affects the quality of tenant you end up with. A good tenant will be turned off by a home that is in disrepair. And, the opposite is sometimes true; a bad tenant sometimes won’t even apply for a perfectly maintained home… “This is too nice for me.”
* You are setting your expectations for the condition you expect it to be returned to you at the end of the lease.
* It shows that you care.

Renting a property can be a very rewarding adventure, or a very difficult one. You really should work hard to set yourself up for success! More to come…