Website that provides all services for lanlords renting apartmetn

[Zulf H.]

Dear BP Members:

Hope you all are doing well . I wanted to get some advice and also best practices.

I recently purchased a 9 unit bldg. and the rents are at least $200 below market value in the surrounding area (Heat and Parking are included in this below market rent). The bldg. and apartments are in good condition, the previous owner had the property for 20+ years and maintained the bldg. very well but never increased any rents. I am considering notifying the tenants about the increase in rent or if they move out, just do a quick update and rent it out at the current market price. I am not too involved with the property as my realstate agent helps with renting them out and dealing with the units.

Below are my questions:

• Should I increase the rent to market value or try to negotiate with the current tenants and find a middle ground. OR should I just ask them to leave once the lease is over and do a fresh quote of paint and rent it out at the market price? I would really like some ideas here ….
• I was considering renting some of the apartment's myself ( without the help of a real state agent). What site do you recommend that provides Background checks at a very reasonable price.
• Also do you recommend a website or company that provide the full suite of services for renting ( positing the listing, finding leads, credit and background checks, and any other services that are useful to the landlord. )

Thanks for you input.

Zulf.

[Ryan Gillette]

1. It's often wiser to keep existing tenants and slowly turn up the dial. It allows you to slowly turn over the property into the higher market rent while keeping vacancy loss and rehab costs more spread out. The downside to a large rent hike is not just the jump in vacancies, but also potentially creating a glut, depending on the size of the market. Let's say in any given month there are 10 tenants out there who want your apartments. Is it better to put 9 units on the market and hope at least 9 of those 10 meet your criteria? Or is it better to put them on the market slowly one at a time and get to choose only the best of the 10? The other thing is your rehab costs. To get market rent, it might require more than paint. Usually there's more repairs (fixing appliances, this and that). All in all, if you try it all at once you could eat a big vacancy loss, have an iffy pool of tenants and a large repair bill. Keep in mind though, some investors go in Day 1 and do this. The rent increases just have to pay for the losses you'll take early on and you have to be able to take that loss year 1.

2. Ask your realtor for a referral. My personal system is pulling criminal and credit through my company, then I do the screening myself. Call the landlord. Call the employer. Check their capacity ratios. Actually look through their credit, not just their score. The big thing, if you do it yourself, is to have a uniform written system and follow it. Even if race or ethnicity didn't influence you, you can't make exceptions for one person and not another. If at some point you get sued, you want to have meticulous records or why you accepted or denied applicants.

3. I'm wary of full service automation. Maybe when you're at a point where the low cost of automation outweighs the extra cost of evictions, it makes sense. The systems I've looked at simply pull multi-state criminal and pull tri-merged credit, and leave the rest up to you. That's the best IMO. The ones that promise to screen the tenant for you.. I'm wary of. I was just looking at one that promised that and their approach was looking at 6 months cash-flow. Promised to get  It's a good tool but a poor way to screen someone because it doesn't give you enough information of income continuity (let's say the tenant's child support/alimony ends in 6 months).