Bought my first property, now what?

Question

So, here goes it.. I bought my first investment property about a month ago. Its a small duplex located near a hospital and one of our universities its a cute place, but OLD. I put the property on craigslist as it has one tenant, but the other side is vacant. I had a young lady interested in the property, put in her application, I did a background check and credit check through a feature on USAA and told her she was accepted. Well, we were going to sign the contract (one I found online) on Friday and allow her to move in then. I got a call from her last night saying she wont be able to move. So, now I'm back to square one and thinking I probably need to get more educated on this landlord thing before I go any further. I had another applicant, but it was a young couple with a small baby and I don't feel like its a good place for a family. I would rather have just a single person in there, but maybe thats not for me to pass judgement. Looking to get insight from others with more experience!

Brandon Turner · Answer

Hey Nicole Grant  welcome to BP! If you are up for a bit of light reading, check out these two posts for exactly how I do this whole process!
	
	How to Rent Your House: The Definitive Step By Step Guide

Hope that helps some! Stick with BP - we'll help you every step of the way!

David Jayne · Answer

Welcome, Nicole!

Personally, I only hire a lawyer when absolutely necessary (setting up an LLC, legal issues with tenants, etc.).  I'm sure lawyers will tell you that you should use one for every lease or paper you sign, but I think that's a little crazy.  Of course, you don't need a lawyer until you need a lawyer...

Hope everything works out for the best!

Zac P. · Answer

Someone above already mentioned about Fair Housing Laws. One of the "protected classes" is age/familial status. Discriminating against this can lead you into big trouble which can lead to major fines. I would suggest attending a Fair Housing Seminar. It's crazy all the stuff that us landlords can get in trouble for, but it's the world we live in. Good luck Nicole. :)

Roy N. · Answer

Essential.

Nicole Grant · Answer

How advantageous would it be to hire a lawyer to put together a lease agreement for me? Or can I follow a basic example?

Nicole Grant · Answer

Thank you for all the response! I am going to put his application through today and see how it looks. I'll keep everyone updated on how this goes.

I cant wait to read through those articles and start gaining knowledge on this whole process. I'm going to try to manage my property myself for now, but we'll see how busy it keeps me.

Mehran K. · Answer

Welcome to the site @Nicole Keller! Grats on your first purchase, exciting!

Be sure to check out Tenant Screening: The Ultimate Guide

Do some research on the fair housing laws. It may not be a wise decision to deny someone because you don't think it's a good place for a family. Especially if the rest of their application is stellar!

Good luck & keep us posted on how it turns out.

Blake Morris · Answer

Nicole,

that just goes to show you how fickle an application is.  Continue to advertise and show your unit until you get a signature.  That way you don't turn down anybody who shows interest and if someone cancels on you last minute you have back ups.  Rent it at a first come-first served basis.  Whoever signs the lease first gets it.

My advise to you is to come up with a way to screen your tenants using a scoring system.  That way you are able to prove that you treat everyone the same and your scoring system you use determines their eligibility or the amount of a deposit you require down.  Don't get discouraged from being a land lord.  If you get good tenants, it will make your job 10 times easier and you wont have to pay a PM.

Message me if you have any questions, I would be glad to help in any way I can.

Jassem A. · Answer

I usually check to see if the applicant has rental judgments or felonies on beenverfied.com.  I had someone the other day who is an E6 in the military try to get out of paying a deposit and last month so I looked up his name and found out he hasn't paid the apartment he's been living at for 5 months.

Aaron Junck · Answer

Congrats on your recent purchase!

Welcome to BP!

If your the one screening your tenants and don't have a PM , I personally would follow my gut feeling on if you feel a person is right or not. Im not saying don't do background checks etc. Aside from all equality and racial issues which everyone is supposed to follow, at the end of the day when you make your decision there is always something that a person can say that would not allow a tenant to move in. It may be previous landlord didn't give you the feeling that your prospect is a good tenant or maybe credit or criminal history doesn't allow them to rent your properties.