All Forum Posts by: Dana Dunford

@Thomas Berridge - I would also look at the macroeconomic conditions. The microeconomic conditions of that property are a good starting point, but appreciation / depreciation on a property can be vastly skewed by what is happening in the global economy. Formulate how you think the financial market, interest rates, etc. will affect your property. Good luck and congrats on getting back into it!

@Tony Velez - Here are my thoughts. Although, keep in mind, if your tenants are using an existing form of payment that works fine (and they pay on-time), then you may not want to (or have a difficult time) switch(ing) it.

• Not my preferred
  
  • Cash - Prone to theft and difficult to track
  • Personal Check - Can bounce
• Preferred
  • Money Order - Not likely to bounce and difficult to cancel (although many have limits)
  • Online Rent Collection - Easy to track and auto-payment doesn't give a good excuse for late payment

For new, incoming tenants, I give them the two preferred options. For existing tenants, I let them use their current form of payment.

@Jim Adrian - I agree on having a conversation with them, especially since they've been there for 10+ years.

@Edward Mccracken -- 

• Yes, each county will have a public record database you can search. Here is the link for your county.
• However, the tenant may be convicted in another county and that won't show up on the records. That's the real reason to pay for the background check (consolidates nationwide). It will also check the sex offender list, which I'm not 100% certain shows up in the county records. (Maybe someone else can confirm?)
• There are mobile friendly background check services for those folks with iPhone 6s.

@Nick Doria - I love your ambition to own 1,000 units and I have confidence that you can do it (you're going the correct route by asking such questions). Here are my responses. 

• Section 8 Tenants: 
  • In CA, you can legally write "no Section 8" in your CL ads, and it's not considered discrimination. I believe it's the same for other states, but you'll want to check regulations.
  • I did a lot of research on Section 8 when we were considering them for our units. Here are some comments (incl. my own) from another BP post.
• Screening Fee
  • It's illegal to charge over $42.41 for screening in CA. Other states have regulations on the max you can charge as well. They don't want landlords to be taking advantage of tenants.
  • I agree that you should charge enough to cover your costs, as the most costly expense is a bad tenant. However, most likely, you con't cover your costs because calling past landlords / employers (30 mins of time) is already $42. So it's a balance.
• Pets
  • It depends on the unit, size of pet, etc.. For nicer units with white carpets and expensive materials, you may want to not allow pets. For hardwood floor unit in a less desirable neighborhood, it may allow you to get increased demand. 
  • I typically don't call it a pet deposit. I just call it part of the overall security deposit. Because, at the end of the day, it's illegal to hold onto that money ... it's just part of the amount held in case the property is not brought back to its original state minus normal wear and tear.
• Creating a Lease
  • Make sure your attorney is a real estate attorney, who knows residential rentals. There's a big difference between an attorney and one who knows how to write a state-specific contract for you.
• Other Items
  • Vacancy is better than a bad tenant. If a tenant doesn't fit your qualifications but is the only one to apply, don't accept.

Good luck

@Shar Day -- Some recommendations:

• Security Deposit Refund: It sounds like you're going to need that security deposit, so don't give it back to them as an incentive to move.
• Notice to Vacate: Check your state's laws and your lease. 2 weeks does not sound like enough time, as you may need to give 30 days notice. Either way, give them proper notice (what's considered fair according to law) and then you won't feel bad about their situation.
• Security Deposit for Next Rental: If they don't have enough money / a cushion in their bank account to afford the security deposit on the next place, then that's a bad sign. They are either (1) living above their means or (2) trying to get you to play fool and give them their security back since they most likely know the condition of the place doesn't warrant it.
• Initial Walkthrough: @Jeff B. is correct on this one. You should do an initial walkthrough with them to outline what is not considered normal wear and tear. Give them the opportunity to fix it before they leave, otherwise they will know (in advance, avoiding issues later) that it will be deducted.

Good luck!

@Markeen Baker - I think that it's a two fold here. 

Question 7: Asking how much are they collecting. In other words, how good is the property manager at getting the rents? Can they get it all collected by the 10th or are they still following up with the tenants by the 20th? 

Question 8: How much are you getting by the end of the month? In other words, after the month is over, have you received all of the rent? I would take it one step farther and ask how much you are receiving and when (what are their averages prior clients).

This gets to the point of what property managers do. They give you a peace of mind. You don't have to worry about setting the rules and making the tenants pay / behave properly. The property manager is the middleman. You'll have to weigh it against the cost of one to see if it's worth it for you. Hope that helps!

@Nicholas Miller - Assuming they answer truthfully and only keeping to 5:

• Do you have a clear background check (incl. eviction)?
• Have you ever been late on a rent payment / how many times?
• What is your credit score?
• What's your monthly income / are you in good standing with your company?

• What would your past landlord(s) say about you? (honest answer)

@Jason Krawitz -- Good to hear you have great tenants and I agree with your logic. Some points:

• Re-writing the lease: Since it's the same tenants, I recommend an addendum/extension. You won't have to worry about the security deposit and re-writing a bunch of the clauses. Your addendum should outline that it's now a month-by-month with 120 day move-out notice clause. 
• Rent Increase: I'd increase it to the new annual rate (5% increase) that you were anticipating, but then hold it constant. I wouldn't continue to increase it each month, although I'd write the lease in such a way that you get the option to increase it if you want to (since they're not signing an annual contract).
• Seasonality / timing: Since winter is one of the worst moving times, look on the bright side! This month-by-month may get you on a summer cycle for your next 12 month lease, which brings greater demand.

 Hope that helps!!! 

@Richard Beatty - - Welcome to BP!

Definitely use the BP resources and "tools." Listen to the podcasts. Some major points:

• The most costly expense is a bad tenant! Do not accept someone who doesn't meet your minimum requirements. It's better to have your property vacant for a little longer until you find someone qualified. Otherwise, you're going to spend a lot of money dealing with a bad tenant.
• Charge a late fee if a tenant doesn't pay on-time. You want to set a precedent with your tenant(s) that they need to abide by the lease.
• Here are some quick tips that I put together (a checklist) on how to manage your property. Feel free to download and check off the items.

@Michaela G. - agreed.

@Charles Feingold - If it's just a SFH with (on average) one turnover, per year, you should use online tools for application, screening, rent collection, and vendor maintenance requests. You'd only need to be there once a year to turnover / host an open house.