All Forum Posts by: Dana Dunford

Thanks @Nick Mertens for sharing! Some great ideas. 

I don't recommend renting rooms individually for long term rentals. The security deposit "he did it, no she did it" to the communal area can be a nightmare, and most tenants (who did not collectively apply together) refuse to be on a lease together (joint responsibility). How are you getting it to work without these risks?

Renting out the garage and other areas is great, assuming zoning and permit laws are followed. 

@Annette Schneider - Some questions:

1. What is the vacancy rate in your area? If it's high, then it may contribute to the problem. If not, see the below.
2. If you are not getting qualified applicants, then I recommend reducing the rent. I would rather have $50 or $100 less a month than a tenant who gets by with late / no rent payment and cost me a $1,500 eviction. It is a lot of time, energy, headache, and cost to have an unqualified tenant in your property.
3. Where are you advertising the property that is not getting traction? You should be posting daily on Craigslist as well as all of the other rental listing websites.

Hope that helps.

Hi David -- If you own the property, then you don't need a license. Here is the governments website confirming it:

http://www.michigan.gov/statelicensesearch/0,4671,...

You can also call the RE department on that link and have them confirm over the phone, to save yourself some attorney fees.

@Rachel Pivonka - If he is 100% staying in his current location (and only moving after he quits his job), then yes ... he does not need to be on the lease until he moves into your place. He still needs to follow your "guest" policy outlined in your lease, which will say something along the lines of ... a person who is not on the lease cannot stay for more than 3 consecutive days. You'll need to make it very clear to the law school student that you have a strict policy on this and if she does not follow ... then it's guidelines for a 3 day notice.

When he does quit his job and move to Knoxville, he will need to sign a lease agreement (which can be an addendum to your following one, mentioning that x tenant is joining the lease with the same terms).

@Rachel Pivonka - Congrats on starting out with your first property. The 3x rule is for total household income. If the law school student meets that requirement, then technically you don't need income verification from the second person. However, you should still have him fill out an application to confirm:

1. Pets
2. Bank accounts
3. Past landlord history
4. etc.

Tell him to leave the Company name blank but to fill out everything else. (Also, if he's leaving his job, then income verification doesn't make too much since unless you can guarantee that he'll have another job in Knoxville ... which you can't guarantee). If he is unwavering about giving the other information on himself, then I would decline him as a "tenant" until he provides that information. And he can only stay as it relates to the guest policy in your lease agreement. I hope that helps.

@Robert Nason - definitely with you on this one:

1. Landlord - makes you sound like a slumlord (per @Sarah Shockley)
2. RE Investor - not specific to buy/hold
3. Property Manager - sounds like a pay for hire position

There has to be a better word and would definitely be an advocate of someone coming up with one.

@David Sray -- Only two methods that I will accept (from a risk mitigation perspective):

1. Online ACH -- setting up automatic late fees, which incentivize tenants to pay on time 
2. Money Order -- it won't bounce on you

I don't accept personal checks because it's a nightmare to deal with bounced check fees. I don't recommend PayPal as it has clawbacks, since rent is considered a service. Dwolla is fairly good though.

@Jimmy S. -- 

Regarding the showing:

I FaceTime / Skype them into a showing (have an agent tour them around the house via Skype / FaceTime). 

Regarding the interview:

You have to be careful about this one. If the tenant meets the credit, income-to-rent, etc. ratios and you reject them (only after the interview), they could sue you for violation of Fair Housing --> claiming that it was only after meeting them in person (their race, gender, etc.) ... that made them unqualified. A better indicator may be to call past landlords and employers to get a better gauge on whether or not they are a good tenant. I know that most owners perform interviews, and that is ok. You just want to be very careful with it to make sure that you don't expose yourself to any lawsuits.

@Mark Kelley - Yes, definitely a small risk, and just wanted to point out. Here is an example of a Venmo clawback. However, if you are screening properly and have really great tenants, there is always a low risk:

http://www.slate.com/articles/business/moneybox/2015/09/venmo_scam_and_fraud_why_it_s_easy_to_get_ripped_off_through_the_mobile.html

@Mark Kelley - We have a very similar process, so it's good to see others catching on to this. The only place where my process varies is the showing of the property to new tenants (I didn't see this mentioned in your post). I use licensed on ground support and pay ~$50 per showing. The reason for this? I like to make sure that the person knows Fair Housing laws. I do everything else remotely. 

My only reservation is with your Venmo rent collection. It's not supposed to be used for businesses (only for peer-to-peer), and therefore you run two risks: (1) not following their guidelines as strictly peer-to-peer and (2) clawbacks from the tenants.