All Forum Posts by: Richard F.

Aloha,

Never make deduction from Security Deposit until after Tenant vacates. Simply send them a copy of any invoice (for citations, damages, or repairs they are responsible for) and bill them for reimbursement. When next month's rent rolls in, pay the reimbursement first if they do not send payment for it. This will leave the rent short, which you then send a late notice, with deadline for payment, and assess late fee per the Rental Agreement. If they still do not pay the cost of the citation, initiate eviction.

Aloha,

Renting rooms is fairly routine, but does require some additional planning and effort. I have always used a standard Rental Agreement that I would for the entire house, BUT, you need to identify each bedroom (1, 2, 3 or A, B, C) by labeling each room, and then reference the room number along with the property main address on the Rental Agreement. (Each bedroom should have it's own Deadbolt, and be a solid core door for safety and security.) You also label other specified spaces such as parking stalls, storage areas, refrigerator shelves, laundry storage shelves, bathroom storage space, etc. The main living room, kitchen, laundry area, bathroom(s), or other spaces as appropriate are all listed on the Rental Agreement as "common areas" that all have access to.

You also need to establish a set of "House Rules" that will apply to all residents and guests. Issues such as cleaning responsibilities for kitchen, bathroom, and other common areas needs to be addressed. Quiet hours and guest policies (including overnight) need to be clear. Trash removal and proper handling; not allowing food or cooking/heating appliances in bedrooms; temperature controls; yard maintenance, shoveling snow, basically anything that you need to tell your kids to do, you need to have a plan for the residents. You need a clear Pets or No Pets policy. If No Pets, I recommend you establish an Assistance Animal Policy, as you will be very likely to get requests for ESA's. It is far better to have it in place and in writing so you can hand it to them when asked, or attach it to their Rental Agreement as an Addendum so they understand BEFORE they ever ask.

It's not a bad idea to have a vendor perform a monthly cleaning, providing you eyes on the property and condition.

Others will tell you to use a pet screening service, which may/may not actually identify the fakers, whereas if you put a specific Policy in place first, they will need to follow specific requirements even IF they are determined to be legit. For example, we require a recent (within 12 months) Veterinarian's report, detailing the animal health, vaccinations up to date, and description at a minimum. We also require the animal be spayed or neutered (to minimize aggressive behavior and prevent an inadvertent puppy mill operation). We also require the animal be leashed or in a carrier in confined areas such as elevators and stairwells. They must clean up after the animal inside and anywhere on the property. The animal, and/or the Tenant can be removed if the animal creates recurring noise or nuisance. For rent by room, you need to seriously consider that an animal could adversely affect other residents, and restrict/control potential interactions. I had a case where a resident had been severely attacked by a dog as a young person, and as an adult was VERY panicky whenever surprised by a dog.

By nature, this type of rental often attracts transient residents. Do not cut corners on screening, deposits, or delay in late notices.

Aloha,

Your Agent should be able to provide you with all kinds of statistics on the local market from the MLS, including Days on Market, number of available units, list vs selling price of solds, neighborhood activity, and much more. The Agent should also be able to provide you the specific comps being used to price your property. Maybe go take a look at one or two in person to really compare finish and overall "feel".

For marketing, be sure you have, at a minimum, high quality photos that lay out the "story" of the home. Videos and other media offer more creativity, but not everyone spends the time to watch them, and they can be poorly done just as easily as poor photos.

The biggest thing that helps sell the house? The House! Make sure it is fully functional; VERY clean, including windows and screens; and a fresh coat of interior paint if it is at all tired or multi-colored or just "lumpy". The pics look generally good, but some areas are somewhat cluttered. Not all buyers can "see through" occupants current use of the space. Even furnishings can affect their impression...everyone has different taste in colors and styles. Consider staging with a different and less "full" style. Be sure the listing is available through the MLS to other sites that many cooperate with, to maximize eyeballs. Open houses, although "old school", can generate local interest through the neighborhood lookey loos, and get some people in that might not otherwise.

With Holidays fast approaching, and school in session, most markets are slowing down and will likely remain slow through February or March. If you decide to rent while you wait, be sure you do not commit the rental to ANYTHING beyond your target date to relist, and be very clear with prospective Tenants of your plan. Do NOT be one of those Seller's that wants to have their cake, and eat it too! Once it goes back on the market for sale, you want it as absolutely easy as possible for others to Show the property. It should be vacant if at all possible. I've seen many deals pass by because a Seller couldn't meet a showing time window.

If your Agent suggested only offering under cash, and conventional loans, they hopefully explained their rationale, which is typically "faster, easier" closing. I do not keep up with loan products, I let the Lenders handle that, and refer my Clients to several preferred Lenders. Your Agent should be able to connect you with one that can update you on current offerings.

Aloha,

If they turned the keys over to you, or otherwise specifically notified you they had left, then get busy and clean/prep for a new Tenant! Don't waste time, Holidays are approaching very soon, and school is in session; most areas will reflect much less interest until March, particularly for anything three bedroom or more.

On your initial inspection, document every room, and inside every cabinet and major appliance with photos, make your list of Tenant damages and get them handled/invoiced within the required timeline per local law. Make lawful deductions from the Security Deposit, document accordingly, and send your reconciliation accounting to the Tenant's forwarding address if known, or to them at the Rental Address, Certified Mail, Return Receipt Requested. If they did not have the Post Office forward their mail, it will be returned to you. You keep it, unopened, for evidence that you made the required effort.

Coordinate other needed, but normal "wear and tear" repairs and touch up as well as any additional updates you may need to get the place back on the market ASAP. Once you get it rented, the prior Tenant's obligation would terminate (unless you have a specific penalty close for breaking the Agreement), and the full extent of what they owe will now be documented. (In most jurisdictions, you cannot "double dip", collecting rent for the same calendar days from incoming and outgoing Tenants.)

When all of that is out of the way, then consider whether you want to go after a money judgment for that amount that is owed. Generally, if the Tenants were just young and dumb, there is a reasonable chance at some point in their life they may desire to clear their credit history which is costing them in terms of high interest rates and denial of financing. If, on the other hand, they are older, past their "prime", with a history of bad habits...it probably is not worth the cost or effort. Those types Just Don't Care.

Aloha,

If there is mail in it, call the police out to make a report. Point out the mail pieces to them. Otherwise, get real cameras on the area, or otherwise secure it with gates/fencing to prevent access. Or both. With high quality videos, you should be able to grab screenshots to provide the police, or copy the video to a thumbdrive for them.

Aloha,

Depends on the actual verbiage of your Rental Agreement, but "NO Smoking" means no smoking...of cigarettes, pipes, lawful medical marijuana (they can get edibles), ditchweed, or any other tobacco products, and they would be in violation of the terms as stated. What does it say regarding remedy for violations? Probably a written notice with specific language and period of time to comply; possibly a fine if provided for in the Agreement or House Rules. Check local LL/Tenant law for options for repeated violations.

Aloha,

You might want to look into the cost and availability of insurance for your proposed "upgrades". Without proper permitting, you will lose a lot of potential resale value also.

Quote from @Kiersten Hegna:

Are townhomes and condos good for starting out or is it harder to get cash flow and appreciation compared to stand alone single family property? The prices in my area are much more approachable for the former 

 Aloha,

Appreciation vs SFH will vary by market. The bigger issue with regard to HOA properties is understanding the true financial condition of the HOA. This is not simply a matter of looking at the monthly financial report and seeing large numbers for operating and for reserves. The current actual maintenance fee is also NOT any kind of indicator of current financial condition, amenities, or the potential for "unexpected" Special Assessments or monthly fee increases. You cannot compare the monthly fees of one project, to those of another project. There is very little correlation between the two.

The Reserve Funding plan, in addition to the Operating Budget are the critical financial documents you need to understand. There are also the By-Laws, Declaration, and House Rules (sometimes collectively "DCC&R") that spell out what your responsibilities are, what are HOA responsibilities, and how those responsibilities are to be carried out by all parties.

To learn about HOA's check for a local chapter of Community Association Institute, they have great resources for Owners and for Board Members that are, in theory, running the HOA. the CAI explains how they are supposed to be operated, based on State laws and Best Practices.

Aloha,

This varies by locale, and there certainly may have been changes in the Big O since I was there, but from prior experience the Tenant would be responsible for their usage, and billing would be from the utility direct to the Tenant. At the time I was there, I do not recall Owners being held responsible for Tenant accounts, but an affidavit would need to be submitted to get service back on in Owner or new Tenant name.

During turnovers, or upon a new acquisition that is vacant, you can request "interim" service. You inform the utility of the turn on date; and, once you have a signed Rental Agreement, initial rent and deposit in hand, and the Tenant has agreed (within the terms of the Rental Agreement) that they are responsible for utils, you call in to stop the interim service effective a day or two after the start of the Rental term. You may want to also sign up for a "leave on" agreement for electric and heat source, although I do not know if they are able to notify you of late payments/past due from Tenant. You may just need to check directly with the util each month during freezing weather.

Aloha,

Given that it is a Rental, the wiring job is sloppy, as such, your cost to repair. Personally, I would not want to see those lines on the ground at all. They are clearly exposed to the elements, passing dogs, and, weedwackers. It should all be in BX, even though it appears to be low voltage. I would suggest pouring a small concrete pad, or installing crushed rock in the area between the AC and the structure, to prevent the need for weedwacking the area.