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Biggest Problems With Tenants...
I am getting ready to rent out my first investment property and am trying to figure out what incentives, policies, etc. to put into my lease. I would like to hear some of the biggest/most common problems other investers have had with new tenants, what they did to correct/guard against these problems, or any other advice that might be useful in making out my first lease. Once I get some replies, I'd like to turn this post into a poll. Thank you.
new_man,
Yes, you can do all the advertising, contracts, screening, etc yourself and save the money you paid to the realtor. That's the way most landlords do it.
Mike
someone asked name of screening agency we use -- It is "landlords united" and they have an application that they fax in and when filled out is faxed back to them. Within in a short period of time (no more than a day) they get back to you with results.
Yes most of us get applications filled out, have a lease on computer so that it can be amended easily and do all of the work direct. Always have an application in the car to give to prospective tenants. If they skirm when they see the application they're not likely to qualify. There is a credit reference and past landlord reference.
NYC leases are probably the most robust in terms of covering a landlord's *** from a tenant... i am just guessing that from all the renting done here. i think there are standard leases prepared and are available online(different ones for different situations).
#1 Tenant Screening Contributor
- Property Manager
- Honolulu, HI
In my experience, it doesn't matter a great deal what you put in the lease beyond the basics. The key is fair and equal ENFORCEMENT. And by enforcement, I mean make it COST the tenant. You see, regardless of the Nationality, IQ, or personality of your tenant, everyone understands money- THE universal language. You can have 50 house rules dictating what your tenant can or cannot do, they will ignore them and do what THEY want to do. It is, afterall, THEIR home (tenant point of view). You can ask, beg, yell, and send letters till your big vein bursts, it won't help. Send them a BILL and they will change their behavior. If they try to ignore the bill, on the day that it becomes past due, deliver an eviction notice. Don't make a deal, or change your mind and let them slide. Make them pay every penny, immediately, or move out.
A couple of important points: PRIOR to tenant signing the lease, sit down with them and detail your actual expectations for their housekeeping, noisemaking, and overall care. Explain YOUR definition of "normal wear and tear", and their responsibilities regarding needed repairs, and most especially your Late Payment Policy. Then follow through!
Secondly, ALWAYS do a THOROUGH interior inspection 45 - 60 days before every renewal, and at least annually. (Hint: a locked closet door with light shining under the door- could be a pot farm!)
My philosophy: There are FAR more GOOD tenants than bad, so I do not waste ANY time with the bad. Move'm OUT today, cause it will cost you FAR more tomorrow!
Good Luck!
being a landlord is a rough thing, especially in NYC, it never pays to be nice(very few exceptions, almost none). i represent several landlords in lower manhattan and have seen their experiences(mostly negative) with tenants. best way to go about it is to have very high requirements, without violating state laws, to qualify as a tenant.
What a great thread! Manhattan, we are in upstate, but would love to hear of your experience with tenants in NYC.
shani
Something I am adding to all my new leases is an incentive for the tenant to pay by the 1st.
The lease shows two rent amount. Ex. $995/mo if paid on or before the 1st (which is the current rent amount for the property). Or $1,020/mo if paid after the 1st.
You cannot say the higher amount is a penalty for not paying by the 1st, BUT YOU CAN say the $995/mo is an discount.
And then I also put in the lease if the rent is ever past due, the discount is null and void for remainder of the lease.
I just get tired of always getting paid last.
Originally posted by "karenmcd":
The lease shows two rent amount. Ex. $995/mo if paid on or before the 1st (which is the current rent amount for the property). Or $1,020/mo if paid after the 1st.
You cannot say the higher amount is a penalty for not paying by the 1st, BUT YOU CAN say the $995/mo is an discount.
And then I also put in the lease if the rent is ever past due, the discount is null and void for remainder of the lease.
I just get tired of always getting paid last.
This is a really good idea. Thanks!
I read the posts. All are great! I'm not sure if I saw one of my biggest, past, hardest to experience valuable lesson or not. But, if so just to re-iterate,
Take care not to skip the basic upfront security steps to protect your investment.
Starting with a full reference, credit, employment and in some cases, criminal check on potential tenants.
Skipping these steps because you have a good feeling about the tenant and/or you really could use the money is dangerous and could be costly.
I've had it go both ways. Learned a lot thru the ordeal from an instructor that tries to destroy her students. (That Lady called Experience)
Out! gonna check into that online payment processing
The most important step is to find the right tenant. It is betterthat the property sits vacent for one more month. Take you time and put the right tenant in your proeprty
Thought some of you might like to be aware of some (relatively) new requirements for renting in _some_ hoas/condos: you might take a look, and consider adding some of these, esp if you own in an hoa:
Our docs have additional, stricter rules on Noise as compared to the County noise ordinance. How do the renters really know what the rule are, if they never see the HOA docs or any other documentation that tells them about the basic rules in within the community? The lease addendum will improve communication channels between the Board, the Prop Management, the owner invester, and the tenants. Many other communities are using similar addendums in order to get compliance.
look at all the other addendums that are out there. Draft a lease addendum resolution with your attorney, have the Board vote on it the resolution, and bring all this silliness to a close.
http://www.playmor.org/forms/lease_addendum.pdf
http://www.chathamsquare.net/Lease_Addendum/Lease_Addendum.doc
http://www.vahoalaw.com/cat-latest-newspaper-column-by-mike-inman.html
ofgift
I lived in a condo and we ended up in a stupid lawsuit over nothing 20 of us spend 40 k on an attorney so if you want to live in a condo be preparred to live by old lady rules.
thanks
sean
To avoid repetitive maintenance type calls for little things, we've added a line in the lease that states the tenant pays the first $50 or $100 dollars of a repair. Basically to cover things like light bulbs and provides a sort of incentive to take a little care in the apartment.
We put in a 50$ charge for repairs.....in the 8 years that I have been a landlord I have never charged this but I told my tenents upfront that it stops problem tenents from calling about stuff that can wait three days......
#1 Tenant Screening Contributor
- Property Manager
- Honolulu, HI
Stipulating that the tenant pay the first X of repairs is a Very Bad Idea. You are correct, you won't get as many calls FOR repairs, but when they finally move out you will have a frickin nightmare! Small leaks that could have been repaired for a few dollars will have done thousands of dollars in damage. If you are a newbie, you will not believe the conditions tenants will tolerate rather than getting prompt, proper, repairs done.
I just re-rented a luxury home where the prior tenant never complained during a five year tenancy about anything, and due to very unusual circumstances a thorough interim inspection was never done:
Range hood inop
Clothes dryer inop
Garbage disposal inop
5 of 7 exterior area lights inop; two interior circuits inop
1 of 6 toilets inop
3 of 5 air conditioners inop
pool sweep inop
5 sets exterior french door handsets so pitted you cut your hand opening the doors
rodent infestation in attic
All this in addition to nearly a complete repaint, stripping and resealing floors that had improper products applied, replacing 4 rooms of carpet, and minor miscellaneous items.
Believe me, I would have MUCH preferred to make these repairs as they occurred, paying out of the cash flow, rather than having the owner fork over nearly 20K to make it rent ready again!
You want to make it as easy and painless as possible for tenants to report items and get a quick resolution!
You missed read what I said.....i'm not trying to be a slum landlord just want them to not expect me to come down on a tuesday night to fix a leaking faucet as opposed to my plumber coming on saturday.....You might be more expereienced then me...... I dont know, what I do know is that everyone has to have their own management system.......It was my goal to train my tennets not my tennents training me.......Best of luck
Sean,
Another consideration is that it is illegal in most states to charge the tenant for maintenance. The tenant-landlord laws in most states require the owner to maintain the property to a certain standard. Passing that to the tenant can spell big trouble in court when the tenant gets a low-life scumbag legal aid lawyer (I don't really like them).
Anyway, just something else to think about.
Good Luck,
Mike
I'm late to the party but I didn't see this covered.
Our biggest problem to date has been with single female tenants moving in scuzzy guys they meet on the internet, no joke. Our lease says no one moves in who isn't on the lease, so we give them notice, but it's mighty aggravating.:pissed: Wish there were some sort of test that would predict which seemingly normal females (who pass all background checks and screening) will be crazy enough to move some jobless felon into their apartment :crazed:
From my experience as a collections officer for a bank...If you say you are going to do something, you have to do it. When you call them for the money and you say...I need the money by the 15th or you’re out. When the 15th comes and you still haven't been paid you have to start the eviction process. If you don't, they now have you. They will walk all over you until you finally get rid of them. Be firm with them like you would with your kids and never threaten anything you aren’t willing to follow through with.
I agree that doing favors for tenants on such things as rent--never gets any better. Got one pair that one pays on time every month and the other has every excuse in the book. One mature and working hard/out of school and the other just a typical "user", living off of family.
After 3 months of having to chase 1/2 the rent, this month I'm going to hold the check for the good one and post a letter on the 6th stating late fees and fact that the magistrate's office will receive the first notice to evict-- although it'll cost $40.00 and be a hassle. They don't seem to understand that partial rent paid makes both still LATE and they won't get a decent place next year
based on my reference.
We're scraping the bottom with regard to tenants in my area this fall. Not many of them and most can't pass a credit check nor landlord reference. Everyone has a pet or wants to get one. No time to devote to the pet--just want 'em.