All Forum Posts by: Chris B.

You can probably rent the unit for more with better cabinets.  That tiny area can be done for well under $10k.  Probably something nice for $5k.  If you do it, will you recoup your expense through higher rent within 3 years?  If yes, consider doing it.  If not, don't.  Its not a sound financial investment.

In any case, don't lower your rent to appease the tenant.  Don't replace it because the tenant asked.  Simply understand this tenant said what other tenants are thinking.

In the long run, you may be better off replacing or redoing it.  Just do it when the property is vacant between tenants and never because the tenant required it.

I've gone through a variety of payment methods over the years and have finally settled on an online rental management platform which the tenant pays through.

1. Checks - tenants always send them late and blame the post office. I can see on the stamp cancellation mark that it was mailed days late. This has been problematic. I have never received a bad check, but it's a concern. I no longer accept checks

2. Cash - This requires me driving to the property to collect and generally is inconvenient. I no longer collect cash.

3. Money orders. Same issues with checks getting them late and its a problem. I no longer accept MOs cashier's checks, etc...

4. Direct deposits to my account.  With this option, the tenant has my routing number and account number.  There is the potential for abuse with this information.  In addition, there is no mechanism to prevent partial payments.

5. Zelle. It can work well under certain situations, but lacks in some ways also. I don’t have any rents over $3500 so I’ve not ever hit that cap which was mentioned above.

1. There is no way to control the payment amount you are receiving. You cannot enforce a policy where only payments in full are accepted. If a tenant wants to send you $500 instead of the $2500 due, they can and if they do that, it is considered that you have accepted a partial payment for the month. In AZ, if you accept a partial payment, then you can not proceed to start the eviction process on the tenant due to nonpayment until the next month. Of course, the tenant may also pay only $500 or nothing the next month and your problem snowballs. There is the trust with Zelle that the tenant will pay in full but there is no mechanism to require it. I've had tenants play games on their last month or two before move out and it has cost me financially.
   
2. I want to be able to determine if I enable or disable Zelle for tenants on a tenant by tenant basis. I want this because maybe I want to disable Zelle for a problem tenant but leave it active for the other good tenants. Therefore I need a unique email address / telephone number set up in Zelle for each tenant. Zelle has a limit of 4 or so linked email addresses / telephone numbers. If I had more than 4 tenants, I would hit the limit. It's also easy for tenants to guess my number or email address and they may discover it works even though I disabled the one address I had assigned to that tenant.

6. Due to these drawbacks, I have moved to an online management service to collect rent electronically. I have the platform configured to only collect rent in full including all late fees or other fees. If they don’t have funds to pay in full, the payment won’t be accepted. The service uses ACH payments and I am charged $2 per payment. Late fees are automatically applied so if the tenant pays 3 days late, I don’t have to listen to their hard luck story and deal with that. Late fees are added and I'm not involved.  The system forces what I need and it's worth the small fee to me.

If I were better and enforced the late rules, then accepting pretty much any of the non-cash options listed above would be fine. I just find this to best fit my needs.  With checks, money orders, cashier checks, etc... these must be received by the 1st.  If not, regardless of excuse, there is a late fee.  If a tenant thinks I sit on a check to get the late fee... prove it.  Send with certified mail and show me that I received it by the 1st.  With Zelle, its hard to prevent the games listed above, but a problem tenant would just not be renewed and possibly be evicted.

I use Innago, but looking at Azibo above, it looks to be very similar.

I pretty much always have a prospective tenant meet me at the house for a viewing before I have them fill out an application.  This does exclude some out of state applications who want to sign a contract for the property sight unsceen.  I don't want these applicants anyway as they are often a problem.  Out of state is fine, but come to town and view the house before you apply here.  Before I offer to meet, I also provide my foundational requirements to them so they will know right then if they are not a good fit and there is no need to waste anyone's time.  I get to meet with them in person during a showing and can screen out the obvious bad apples that way.  For example, if a family comes to take a look and the kids are out of control running around the house slamming doors, this family is not for me.  I don't care if they have kids.  I do care if they do not show respect for the property.  If the applicant reeks of cigarettes, they are not for me.  You don't get this oppertunity with unaccompanied viewings.  I own the property.  My skin is in this game.  It can be a hassle and is time consuming and therefore an added cost to me, but I have found great value with this method.  While we are talking, I ask the standard questions and learn more about them and provide them answers to their question.   I offer a printed application or offer to email them a pdf of it when they leave.  By this point, I have already formed a starting opinion of the applicant.  I pick the best qualified applicant and don't necessarily process applications in a first in, first out order.  I also offer open house times usually lasting about 2 hours when I have many interested applicants.   I rely primarily on Zillow for listing and leads.  I accept, but don't trust Zillow applications.   It's a good start, but insufficient.   Problems with the Zillow applications include, missing data:  applicants fail to completely fill out the application leaving large gaps in information.   I also need a separate application filled out for each adult.  You rarely get this through Zillow.  Information is not properly verified.  Income claimed appears to be entirely unverified.  Last and possibly most important,  is the application does not provide the landlord sufficient legal information such as drivers license, social security number, etc...  without keeping a copy of this information, it makes it difficult to hold an applicant accountable if there is a problem. 

My limited experience with cosigners is that they are nowhere to be found when needed.  I no longer accept them.  They may end up in a different state,  at a different address than that which you have on file, different phone number or don't answer.  Too much hassle.  I want to know exactly where the people are who are responsible for my rent and if they live in my home and can be evicted if they don't pay... I know where they are and there is some motivation and responsibility here (hopefully).

I wouldn't recommend a LLC in Joseph's situation. With an LLC, there needs to be some separation between the owner and the unit. I presume with a house hacking scenario, you as the owner are doing a fair bit of the interaction with the tenant as well as some portion of the maintenance. My understanding with that engagement, an LLC won't protect you. Second reason is this is your one and only property right now. No need for an LLC with 1 property as its not protecting you unless you have a lot of wealth tied up somewhere else and you were not managing the unit.

I suggest both routes.  Perhaps, try a broker first.  Get a good quote.  Take the quote to a big company and see how they compare.  One thing to watch out for is insurance companies may offer big discounts for the first year and then surprise you on additional years.  Progressive car insurance does this for example.  I got a quote through their online system even though I am already a customer and the online quote was something like 35% cheaper.  I called them about it and they said that was an introductory offer only.

In all of my units except for 1 I exclusively use SW Accessible Beige for all walls in satin.  For doors and trim I use SW Alabaster in semi-gloss.  In bathrooms I sometimes and sometimes don't use the same colors but all semi-gloss.  I stick with SW plain super paint for the walls.  I've sense learned of superior paints, but as I have already used this, I stick with it.  Other paints that have the satin finish from the same vendor are not the same and may not mix.  I used some SW branded paint, top of the line of what they carry, and the satin did not match at all and it needed to be painted over with super paint.

People use flats and satins on walls because they are more appealing.  People use semi-gloss on walls because its easier to clean.  You can't clean flat at all.  To some degree, the quality of your clients will determine what you use.  if you tend to have more respectful tenants who take care of the property and its a nicer house, go with satin.  If you generally have tough tenants who care less for nice things and don't take as good care of the property, use semi-gloss as it will save you some headache.

Glossy paints show off imperfections in the wall more easily... that crack that was plastered in or those holes that the last tenant made that weren't filled in perfectly...those kind of things show more on a shiny surface.

Semi-gloss is easier to wash off than satin which is easier than flat.  Dirt on the wall frequently needs to be painted over on flats and occasionally satins.  But in reality, sometimes its just easier to paint over a messy wall of any sheen including semi-gloss rather than spend the time scrubbing it clean.

I'm not in the Cleveland market, and none of us know the exact home you are renting and at what rate but with that disclaimer that I know nothing about your market and am full of ideas, here we go...  

$9k income.  Is this a $3k / month property you are renting?  Otherwise if they are trying to rent a $1.5k property with that "claimed" income, its a red flag.  Working from home means nothing.  Check with their employer that they are employed there and have been so for a while.  Ask what title the person holds.  Pretty easy to look up average rates (if the employer won't say the pay) in any market for a position online.  What those above me are getting at is that the reported income is highly suspicious.  I've seen fake paystubs.  Applicants dish them out in every market.  Check the past few months of deposits into their bank account.  Ask them to pull it up on their phone right in front of you and show you a few recent statements with this paychecks deposited into their account.  It should be regular and every week or two.  It should be fairly consistent in amount also.  Last, it should add up to what they claim minus reasonable withholdings.  They can't easily fake this check.

If they are self employed, also check several months of bank deposits and look at the last 2 years of tax returns.  Don't feel bad asking as self-employed people are used to this request.

650 and 600 aren't horrible credit scores, but they are FAR from great.  Why do they have such low credit scores with such good income?  Ask for an explanation.  Do a background check with credit and criminal history yourself and verify their information.  Don't accept a credit check an applicant provides to you.

I normally deny all eviction applicants.  In this case, the mom has declared no income and its been a long time so I'd ask about it, but likely allow her.  I ask applicants a lot of questions in person casually while showing the property.  A lot are full of BS.  I can never tell who is telling the truth but I can get a gut feeling.  On the other hand, applicant say and do lots of stupid things that I will disqualify them for.  For example, I ask if they smoke or vape.  Answer is no and then after the viewing I see them though a window talking out by their car while vaping.  Denied.  Not only is that against my rules, but they also lied to me.  This kind of stuff happens frequently.

Overall, there are a lot of hints that something is wrong here.  Don't trust anything you are told or shown.  Verify everything.

Some good points here, but I also think there is more that can be done.  I'm going through a very similar situation right now with one of my tenants and this forum has helped immensely.  I think we are both nice guys.  As one of the YouTube real-estate personalities I follow has said:  "Nice guys finish broke."  -- Ernie Garcia.   My generalizations below are from my experience so take it for what its worth and here is my experience.

The family moved in.  Three months later I do an inspection and maintenance visit.  Boxes and piles of everything everywhere.  Most of it appeared to be worthless stuff.  The garage is completely full and there is some junk in the back yard.  It was a safety and health hazard.  A rescue crew in the dark would never be able to navigate it.  With so much stuff everywhere, I knew pests would eventually come. I've never had a tenant near this bad before.  I verbally told them they need to clean it up and they provided excuses.  I then come back 2 -3 months later for another maintenance visit.  Everything is the same.  I provided them a written notice and sent it certified mail.  This was a demand letter, but didn't follow the state requirements.  I come back 2 months later and nothing has changed, but we now have mice droppings across the house.  Now I write them the official 10 day notice per AZ law.  As the end of the lease is a few months away, I also write a notice of intent to not renew the lease.  I verbally tell them that if they can clean things up, I'll reconsider, but by now I'm 90% sure they won't put in the effort.  One more inspection 30 days later and nothing is cleaned up.  We are now about 2 months away from the end of the lease.  In summary nothing including threat of loosing this home spurred them to even try to clean up their mess.  Now the mess includes fast food boxes and papers everywhere.  fries on the floor and vermin.  Spilled and splashed drinks everywhere.  So far they have paid rent in full and on time, but per a conversation with the last landlord after they moved in, they skipped out on paying the last of the rent to him and never returned the keys and left his place a mess.   I'm prepared with this knowledge now.  

In AZ, a tenant can pay any amount of rent.  Even $50, and if the landlord accepts it, he cannot evict until he starts over the next month.  As such and in preparation, I stopped using Zelle and have now switched to an online site for rent collection that only accepts payment in full.  If they don't pay the last month for me, I will immediately start the process with a 5 day notice and then an attorney taking over.

If I were to do this over again knowing what I now know, I would have immediately served them the 10 day notice after my 1st inspection and then 10 days later another notice as they likely wouldn't have complied.  Photograph everything.  After two notices, I would have started the eviction process.  I've lost a lot of sleep and had a lot of stress from this family.  In addition, the home has physically suffered.  I vow to never let a tenant control me like this again.

I never allow vaping or smoking of anything anywhere on the property so the cigarette butts would also be an immediate eviction.  I hate the smell of cigarette smoke and definitely don't want it in my property.  Cleaning up after a tenant who smokes is expensive also.

At 5 months away from the end of the lease, I'd now suggest you follow your state's guidelines for sending a fix or quit notice and doing it immediately.  At minimum out of respect for the downstairs tenant.  I always treat my tenants respectfully and don't appreciate tenants who do otherwise to me or neighbors.

You don't need any excuse to go in and look either.  Simply provide notice.  48 hours is required here, but I generally provide greater than a week notice.  I go in, change the air filters, replace smoke alarm batteries occasionally, I check for leaks under every sink.  In doing so I get a good sense of how the tenant is treating the property.  I take pictures of concerning things I observe and file it away.

You need to need to stop being a nice guy.  Do your inspection.  Send the 10 day notice to fix or quit or your local equivalent.  If your place is like mine, its only going to get worse over the next 5 months.  Get them out.

As a residential home owner, I've had nothing but communication issues with contractors also.  A note to all contractors out there:  If you don't like something about a project, let the owner know and optionally why if you aren't afraid of delivering the blunt truth and then feel free to walk away.  Otherwise you leave people hanging.  I dealt with this last year.  Went through 6 contractors over the course of a year for one small project.  Took the final contractor who did the project under a week to complete and brought him $15k for about $5k worth of work.  Everyone was happy.  Insurance paid me and I paid him.  If insurance is a problem, just tell me.

You asked what types of updates we would like.  Here's my reply:  Where are you?  Why are you not replying?  You committed to start on this date never to be seen again.  You provided an invoice and I OK'd the project and you disappeared.  Please let me know what's going on.  Hey, if its just me, that's cool also, just say something.  Are you still alive?  Pick up a phone, text me that you can't do the project, and then we are done.  Is that so hard?

Peyton, I congratulate you on not only thinking about communications, but also how to improve it.  I'm sure property owners can be difficult also, so just keep the updates going out.  Your communications alone would raise you to the top 10% here in AZ.

One option to consider, assuming you and your siblings are fortunate enough to be in this situation is for the property to be assigned to you only and if there is enough other inheritance to equal things out for everyone, the rest can be spread around to level it out.  If its close, perhaps they will allow yuo to sign a loan with them to pay off the remaining amount.  I think this may need to be declared within the trust and as you mentioned yours is irrevocable, it may no longer be an option.