Advice to New or Wannabe Be Landlords....

[Bettina F.]

So many posts here involve new landlords seeking advice on common landlording problems.  What to do when tenant does not pay rent?  How do I handle unauthorized residents?  My tenant is parking on the lawn!  My tenant is smoking in my non-smoking property!  How do I evict my tenant?

New landlords -- you ARE going to run into these common problems.  You will have more self confidence, be a better manager, act sooner, and SAVE MONEY if you anticipate these common problems and know how to proceed BEFORE YOU PLACE YOUR FIRST TENANT.

1) Print out your local and state tenant/landlord laws and put them in a binder.  READ the laws -- you do not need to memorize them, but have a working knowledge of what is legal or not.  You want to be familiar enough with your laws that you can find the specific section to re-read WHEN an issue arises.

2) Know the legal timelines, proper forms, and legal means of service for your jurisdiction.  My courts helpfully provide downloadable PDFs of legal forms for 3 Day POQ notices, affidavits of service, etc.  I have these PDFs saved on my computer.

3) Spend a morning observing in eviction court.  Look for one or two attorneys who are handling the majority of cases.  These are usually the local flat fee eviction attorneys.  Ask for their card out in the hallway.  Now you have a legal team.

4) While you are at the courthouse, find out where the Clerk's office is.  See if they have information on the eviction process in your locality.  I have found court clerks to be very helpful people, and a wealth of knowledge.

5) Take a Fair Housing course, either on-line or through your Fair Housing office.  Know what is legal and what is considered illegal discrimination.   Most Fair Housing violations come from innocent actions on the part of the Landlord, not intentional discrimination.  Have a written set of rental criteria, and follow the SAME process for all applicants.

6) Know the legal process for serving Cure or Quit notices for lease violations.  Serve early -- learn to nip problems in the bud.  Get that car off the lawn before the landscaping is ruined, or get that tenant out of your house.

7) Have a "landlord speech" ready to give to applicants or at lease signing.  Let them know that paying rent and maintaining the property MUST be their first priority -- you do not "work with" tenants.  Practice this speech until you can say it with confidence.   Tell them at lease signing about your inspection schedule, and stick to it!

8) Have some monetary reserves.  I  know you want to acquire more property -- but this unit needs a cushion to cover vacancies and unanticipated repairs.   Desperate LLs make poor decisions.  You never want to be desperate.

9)  You have a lease -- but what about your other move-in paperwork?  Do you have your pre-rent move-in photos and property condition checklist ready?

When these items are done, you will be a much stronger, more confident, more profitable LL. 

[Bettina F.]

Originally posted by @Nicholas Richard Ray:

This is a great list of valid points. Brings up enough info and suggestions to get on the right path without spelling it all out (which I assume would take a very long time).

Out of curiosity, do you have any tips unique to inheriting tenants? Would you still do the "landlord speech"? I ask because this is a very possible situation for me soon.

I do not believe that most inherited tenants will ever see the new LL as the authority figure.  I believe that, unconsciously, the inherited tenants have a "we were here first" mentality.

Our building was 100% full when we bought it.  We sent out a new owner letter, introducing ourselves, providing contact information, and and telling the tenants that we would meet with them individually to go over our company's rental agreement.   The previous owner did the usual one year lease rolling over to month to month rental agreements.  We wrote up new leases -- keeping the rent and lease terms (e.g. dates the lease runs) the same for those on leases.  For those on month to month, we put in a 60 day notice of rent increase right in the new rental agreement.  Everybody signed.   We wanted our Class C tenants on month to month, instead of leases.

Our building closed mid-month (which I recommend, BTW.)  Our first test as LLs came on the 5th  of the following month when rents were due.  No rent -- no communication -- from three tenants.  We served 3 Pay or Quit notices, while we were painting the common areas.  The first push-back came when we actually enforced lease provisions.  I had a female tenant get in my face and say "Shawn (previous LL) never did it this way!"  I replied nonchalantly "Shawn wasn't making any money.  That is why he sold the building."  It shut her up.  When I had tenants threaten "we will just move out!"  my response was "We always expect some turn over when a building changes hands."  The key is to project an image that you are an experienced LL and that nothing fazes you.  Have your comebacks ready.  The LL speech would not have worked on these inherited tenants, because the previous LL had taught them that it was OK to ignore lease provisions.  (BTW, 2 got me the rent within hours, the other the next day.)

We did not want a mass exodus, but our plans always were to systematically vacate the units, upgrade each unit and raise rents.  The first non-renewal we gave to a late payer helped shape up the whole building.  Word quickly spread that we meant business.

We bought our building in 2014.  We only have two inherited tenants left, both elderly in poor health. The tenants we placed are better qualified, pay rent on time and are easy to manage.