Improve Apartment Operations

[Mark Takata]

Hey BP, 

Background: 

I'm trying to help my dad improve operations on his 8 unit appt complex in the West Adams area of Los Angeles, CA. He currently has 6 of 8 tenants on month to month (2 newest including one that moves in today 9/1/18 are the first on 1 year leases); drives there every month to collect money orders and drives back again when they are late (he does charge late fees w/o exception). There are a few tenants that are late every month and pay the late fee every month. Ultimately looking to hire Property Management, but in the mean time looking for some suggestions.

Questions:

1. Strategies to transition existing tenants from month to month to 1 year lease agreements?

2. How to transition existing tenants to electronic payments/direct deposit or are there any other recommended forms of payment? Cozy seems to be recommended, but some of his tenants are not too tech savy; he has one that doesn't have a cell phone at all -just the land line in the appt. 

3. The 6 of 8 that are on month to month are way below market rent ($300-$400/month) are there any recommendation on how to bring them up to market rent? especially for those that are consistently paying late - the latest request was for my dad to accept rent 23 days late. I've asked him to send me copies of the rental agreements to see what the terms are for late payments - not sure what he can legally do. 

4.  Ultimate question: Looking for referrals for Lawyer/CPA/Property Management Company in the West Adams Los Angeles, CA areas.

Thanks BP Community. I'll continue to scour the landlord forums as well.

[Matthew Olszak]

Originally posted by @Mark Takata:

Hey BP, 

Background: 

I'm trying to help my dad improve operations on his 8 unit appt complex in the West Adams area of Los Angeles, CA. He currently has 6 of 8 tenants on month to month (2 newest including one that moves in today 9/1/18 are the first on 1 year leases); drives there every month to collect money orders and drives back again when they are late (he does charge late fees w/o exception). There are a few tenants that are late every month and pay the late fee every month. Ultimately looking to hire Property Management, but in the mean time looking for some suggestions.

Questions:

1. Strategies to transition existing tenants from month to month to 1 year lease agreements?

2. How to transition existing tenants to electronic payments/direct deposit or are there any other recommended forms of payment? Cozy seems to be recommended, but some of his tenants are not too tech savy; he has one that doesn't have a cell phone at all -just the land line in the appt. 

3. The 6 of 8 that are on month to month are way below market rent ($300-$400/month) are there any recommendation on how to bring them up to market rent? especially for those that are consistently paying late - the latest request was for my dad to accept rent 23 days late. I've asked him to send me copies of the rental agreements to see what the terms are for late payments - not sure what he can legally do. 

4.  Ultimate question: Looking for referrals for Lawyer/CPA/Property Management Company in the West Adams Los Angeles, CA areas.

Thanks BP Community. I'll continue to scour the landlord forums as well.

1. Strategies to transition existing tenants from month to month to 1 year lease agreements? 

Don't give them the option. Give them notice of termination of their MTM lease, and enclose a yearly lease. They can either sign or move. Is there a reason you want to be held to the terms of a yearly lease? Depending on your asset class the lease could be more binding on you than on your tenant.

2. How to transition existing tenants to electronic payments/direct deposit or are there any other recommended forms of payment? Cozy seems to be recommended, but some of his tenants are not too tech savy; he has one that doesn't have a cell phone at all -just the land line in the appt. 

Again, depends on asset class. In the lower classes folks don't have bank accounts so the direct deposit is nearly impossible. Setup a pass-through account at your bank with the sole purpose to collect rents, and tell tenants to write their address/unit # on the deposit slip. Unless you have a TON of units this isn't too arduous of a process to reconcile, and I charge a $50 fee if a tenant's payment needs to be researched due to them not noting their unit # on the slip. Otherwise they can mail in a money order, but warn that they'll be assessed a late fee if it doesn't arrive by the due date - ie I don't care when it was sent, I care when I receive it.

3. The 6 of 8 that are on month to month are way below market rent ($300-$400/month) are there any recommendation on how to bring them up to market rent? especially for those that are consistently paying late - the latest request was for my dad to accept rent 23 days late. I've asked him to send me copies of the rental agreements to see what the terms are for late payments - not sure what he can legally do.

Issue a notice of non-renewal, that's the beauty of a MTM lease. You can get rid of them for whatever reason (well, depending on your local ordinances). Just make sure your turnover costs won't outshadow the rent increase, but @ $4800/unit/year I doubt that's a concern.