All Forum Posts by: Ying B.

Besides liability, loss of use is very important to require and I have had success with tenant carrying loss of use.  Most renter's insurance quotes I see do have this coverage and often it is a percentage of the personal property.  For example, State Farm renter's insurance has loss of use as automatically 40% of personal property.  Lemonade also offers Loss of Use as a percentage to personal property.  I, as a landlord, could not get loss of use per advice from my State Farm agent, basically that option is not available as owner as far as State Farm is concerned.  I do have loss of rent coverage on my own policy in case time is needed to fully restore the property due to a covered peril, then the rent it is under repair is covered on my end. 

It depends on the product.  I have excellent experience with Moonlight Pine LVP (7mm wear layer) throughout my rental. Everyone loved this floor upgrade: Modern, clean, varied pattern gives it a premium look than those with repetitive patterned cheap version.   Currently they only sell the 8 mm wear layer.  https://www.llflooring.com/p/coreluxe-xd-8mm-w-pad-moonlight...   The seams between the planks are tight.  Had it almost 3 years, hold up well.  Please know I had used this following brand also but poor quality in terms of separating at the seams so I do not recommend this brand: https://www.carpet-wholesale.com/item-407209/luxury-vinyl/southwind-luxury-vinyl-flooring/rigid-plus-plank/rustic-barn.php?

Thank you @Michael Dumler and @Logan Laperriere.  Your feedback is very valuable.  I did realize after I made this post that the Applicant's monthly car payment of over $700 is actually included in the total monthly debt obligation which is above $1300 so I over calculated the car payment into the expenses. 

I had a listing link in my initial post but I asked Bigger Pocket to remove it to be protective of the data (I can DM you).  Thank you.  

I have a listing priced at $2450 (4 BR, 2.5 bath).

I am currently focusing on 1 applicant who makes ~100K in her current job for 25 years, excellent rental references for past 9 years but my rent is $800 more than her current rent and she already acknowledged that she is pay check to paycheck.  She communicates well and complied with my requests for documentation.  No pet, non smoker.   Only herself will be living in the new residence and daughter in college probably spends summer and weekends in the residence so it is not a large household.  

Her credit was in the low 500 but this is one area I am willing to be flexible as I do not like to compromise on income/rental history/no pet.  The issue is, based on her credit report and other known info, I added all the expenses: (car payment $722, debt obligation/month $1900, rent, renters insurance, utilities, estimated grocery, living necessities, her total **essential** expenses would be at least $800 greater than her net income.  Also she had a Chapter 13 in 2017 that she voluntarily dismissed (did not go through with it) and based on her, it did not affect her debtor's accounts.  She is currently in a Debt Relief Program where she pays a monthly installment of several hundreds with the goal of fulfilling her debt in 4 years.  I feel that she would be struggling to make rent on a long term basis primarily due to what seems to be higher debt obligation ($129K).  Granted there are also additional financial burdens not reflected in the credit report. 

I am the type of landlord who maintain my property with high standard, not cheap with upgrades and new systems, going the extra miles to fulfill my Landlord responsibilities but I also like to enforce my bullet proof lease. I don't like to make exceptions or compromise on the Lease agreement.  

Problem is the people who submitted applications or expressed interest in my rental: 60% gave fraudulent info, the rest do not qualify one way or another.  I am on a mission to secure a tenant starting in January. I thought I would have a pool of good candidates after the new year (it was the case last year around this time) and I would have no problem placing a qualified tenant by Feb 1 or latest early Feb but the activity level has been very low.   This candidate is by far the best candidate that showed up in January.  

A good friend of mine suggested I should take her as my tenant because what was perceived to be a prolonged softening rental market that is happening and extremely limited quality tenant pool. By the way I have observed that comparing to last year same period, comparable SFH is cutting the price 10%. My friend said even if this person could be struggling and be late a couple of times a year or may not make 1 month rent once a year, since she is a long term tenant per her past and paid her rent without fail every month, and is motivated to make the new rental situation work for her financially, long term, if she stays 5 years, although occasionally could struggle a bit, I still will do better than most other tenant choices (frequent turn over, etc.)

My rent is still covered by my past tenant at the moment even though the property is vacant as the Lease has stipulations for that the past tenant has honored faithfully. But I intend to give the past tenant a break by finding a replacement tenant very soon.  However, if I suffer 1-2 month vacancy beyond now I am OK with that too as I can cover the expenses and do not feel desperate. 

Any feedback?  Should I approve this Applicant? 

Thank you.  

I always check rental references with a google form and recently I also asked to see the ledger.  I have always had thorough response from the Landlord, esp. if they are an official property management company. I have received ledger from PM companies before.  I have found harder for applicants to be willing to provide bank statements (in my case is used to cross reference their pay stub, not to check the rent payment).  They may also self eliminate themselves realizing they will not pass my screening therefore choose to not provide the info despite of wanting to "move forward" with the process. 

@Jamie Banks 

The issue is as far as I know almost all Leases when ALE types of companies are involved the  insurance policy holders are listed as the tenant. When I work with ALE, they want the house to be unfurnished so they can furnish it.  Since ALE hires a company to supply furniture, install washer and dryer but ALE is not on the Lease, this particular situation seems to be a loophole for companies such as ALE to not have liability if their hires cause damage not the tenant.  That's the situation I am trying to address. 

@Jamie Banks

I understand there are multiple parties: 1) displaced insurance policy holder (tenants)  2) ALE 3) The company that supplies all the furniture and install the washer and dryer.  I also understand typically the lease is between the property owner and the tenants.  However, if for example, the company did not install or disconnect the washer and dryer correctly (such as leaving a valve on) while water is turned off prematurely, causing damage, what language do you put in the Lease to also hold other parties accountable such as ALE and appliance install company?   

Also I would require renter's insurance for sure.  Does the tenant's liability insurance kick in if there is damage caused due to their negligence? 

Thank you. 

Update: I just got approval from the Adjustor and will show them the property soon.  I will seize the moment. 

@Nathan Gesner
I don't believe your comments regarding milking insurance is supported in my case.  Please note, I have mentioned the Insurance company asked for a 3 month lease and then go month to month. They are happy to pay a premium and they said they have seen approved 25-30% higher than asking price in the past.  So I expect that range to be the norm and reasonable.  My regular 12 months lease is $2500.  I increased to $3500 asking rent with insurance which allows me to have $1000 * 3 = $3000 for a 1 month vacancy due to accepting a 3 months lease.  This does not even factor any repairs in less than 3 months stay.  I can turn over a property within 10 days if there is no major damage.  If tenants leave end of month, I get ready around the 10th of the following month, new tenants may not be able to move in till the following month as they already paid their rent for that month where they live so there is a good chance I have 1 month vacancy after 3-4 months lease.  Asking $3000 more to compensate for that vacancy is very reasonable and $3500 is the minimum that works for me.  My premium is 40% not 30%. 

Upon researching, I discovered this thread 
https://www.biggerpockets.com/... where people who have experience with placing insurnace claim tenants have given real data as to what they have been offered by Insurance carriers: 6 months minimum, 50% premium, any damage above security deposit, as long as you can prove the tenants were responsible and you did incur the cost to remedy the damage, the insurance covers. I hope the info from this cited biggerpockets thread is not fraudulent.   

By the way I am not like some landlords, I am proud to say my properties are free and clear (I know it is contrary to what is advocated by many in Biggerpockets).  I put in capital investment as an institutional investor as the house floor, system, roofing are fairly new with higher grade material and high quality labor and there is no delayed maintenance.  Just because I choose to keep the property vacant, does not mean it is not worth $2500, as I have studied the market in my zip code very closely and very regularly and I am confident I am offering a high quality product at a reasonable rate.  I have 35-40 leads and there have been 6 applications (but this is because I do pre-screen over the phone) and have some filtering before it gets to the application phase.  Out of the applications I processed, they almost all fabricated past landlord info which is so easy to spot.  Some have evictions that I can ascertain within 10 mins after checking magistrate court records with address/phone/name match.  One presented fake pay stubs saying she is a senior network engineer but her employer info is not publicly available and I asked for coand she again sent me an email address that does not have the domain matching the company, and from the recipient address on paystub, I checked by calling the apartment and they said she is not in their system.  Whoever fabriated her paystubs are not intelligent enough to make a convincing story on easily discerned details.  There was one couple who seemed to be honest but they only make $70K combined where I need at least 90 K gross to qualify them.   By now I have encountered a full spectrum of people who showed interest and I believe I have conducted my business very properly based on the education I acquired through reading and practice and lots of from biggerpockets.  

A good debate is healthy.  I have learned a lot from you Nathan in the past but it is OK to disagree some times. 

Thanks for your input so far @Phillip Austin and @Phillip Austin.  I told the middle company the following as I want to timely respond to them.  I also let them know I am interested in this deal being worked out.  

Rent till 4/30/2023: $3500/m with Jan prorated per the number of days stayed.  After 4/30/2023, Month to Month rate is $200 more at $3700.  

(I really don't think lower than $3500 will work for me as it only gives me 1000*3= 3000 to protect me for potential 1 month vacancy when they leave).

Security Deposit: 1-1.5 month rent but open to 1 month (pending screening outcome also). Move-in Admin fee: $200. Cleaning Fee: $500 if tenants keep the property reasonably taken care of (meaning not extremely filthy).  I really do think $500 is the minimum basic cleaning cost.  It will not be a detailed clean. 

Non Refundable Pet Deposit: $500 total for both dogs; Pet Rent: $35 each dog

Washer/Dryer hook up need to be done by Appliance company vendors (I used them before) to ensure done right. Stainless Steel Braided hose already in place to be used. W/D should be no more than 3 year old.

In this case, the middle company will furnish the place and housewares.

There is another area that I think Owners should at least be aware of, i.e. you are dealing with 3 or maybe 4 parties really: 1) Tenants, 2) middle company, 3) crews that do the move-in and out of furniture and W/D connection, and 4) insurance carriers. If there is no major damage from the tenancy (water/fire due to negligence), then you are good but if there are these types of major damages not due to Landlord neglegence, then the fact that Tenants are the only party on the Lease, it can be challenging to go after the other parties.  I had this happen to me before where the company who disconnected the Washer did not close the Valves and Tenant turned off Water several weeks before notice date so it actually left me with a big insurance claim.  I have a call in with my attorney about how to protect ourselves when multiple parties could potentially be liable but at least this time around, I am more aware what could go wrong and could be smarter and more proactive.