All Forum Posts by: Dan Perrott

@Brandon Jividen I set up a clearing account at a local bank and all of the tenants can go into the bank to make a deposit or set up direct deposit (transfer) into the account.  This is a no cost solution.  If you allowed debit/credit payments through a service, a % may be taken from the deposit. 

@Tyler Kaye I directly text with all of my tenants.  If I am not available for a longer period of time (vacation), I text out the instructions of who they can contact in my absence.  

Additionally, I text out ahead of time (24 hour notice) if I am coming into their property for maintenance work.  I have them approve that I will be coming into the property in case it is too inconvenient for them.   

I also text prior to entering and when I leave a property.  It is used to time stamp when I am in the property.  

@Anthony Wick - we charge a $25 fee per month per pet with a size limitation of 25 lbs. Also have an addition of $100 security deposit per pet. We have all of this documented in a pet lease addendum to the lease.

@Nathan Gesner  @Sam LLoyd - I agree with Nathan that using a hold of the market agreement is the best way to secure a property for a tenant until it becomes available to move-in.  Here is the leading statement in a Hold Off the Market Agreement that can be used.

RECEIVED FROM John Tenant, APPROVED APPLICANT,

THE SUM OF xxx Hundred and 00/100 *** Dollars, ($xxx.00).

xxx-Hundred and 00/100 *** Dollars ($xxx.00) of this sum is nonrefundable. It shall be used for the purpose of holding off the market rental dwelling know as 123 Main street, Anytown, State 12345 for the period of MM/DD/CCYY through MM/DD/CCYY only. If applicant moves in, it shall be applied to Lease Deposit monies.

I am in no way giving legal advice and the above statement is an example of what could be used.

@Ethan Anderson @Arturo Colmenero - I live in Indianapolis and invest in Indianapolis.  The map/description is not completely accurate.  You need to research your exact area because some of the map is way off.  You cannot cut up the city by zip codes.

We started we were 45 and 10 years later we have 8 doors producing 3k+ positive cash flow (above all expense) per month.   You don't need high quantity but high quality properties to produce steady income.  We still look to add to our portfolio but are very picky.  We self-manage -  looking at properties that have low maintenance to support.

Age can provide more resources to purchase but I wish I would have been in REI in my 20's. But age is not the limit. My grandparents started in their 60's and supported themselves quite comfortably thru retirement.

Note that we manage our properties ourselves so having a property manager defending a tenant is disturbing at best.  I would be moving onto another property manager.

I thought that I would share how we handle the situation as self managing the properties.

I do a few items to prevent this situation:

1. I take photos prior to move-in of entire property.  
2. I provide a walkthru form to the tenants upon move-in that they must complete within 1 week.  They need to itemize anything that they identify that needs to be fixed or to report existing damage.   We walkthru the form together once completed and both sign the form.  We have a documented agreement of condition at the start of the lease.   I also take photos with the new tenant at the time of walkthru of anything in question. - make sure you get them in the picture to avoid issues.
3. I provide at lease signing a form that lists out the costs (move out charges) associated with damages or cleaning fees that they will incur if the property is not provided back to us in the same condition (less normal wear and tear).  The new tenants sign this form as part of the lease.  They have a full understanding of what they will be charged.  I also give them a clear definition of wear and tear.  Items not on the list of charges are charged at cost - like an estimate from from a 3rd party contractor to make the repair.
4. On move out, we pull out the walkthru form from the move-in week and use it as the base to determine the charges.  We do this together upon move-out.
5. We send out the itemized listing of charges within the 45 day statute in Indiana.  A refund is provided if required.
6. In rare cases if the damages exceed the security deposit, we turn over to the lawyer for small claims court filing to recover damages.  We have never had to go this far as the tenants have paid the excess to avoid court.

We use a fully documented process to avoid conflicts upfront.  We have learned that the tenant actually likes this process as it takes all questions out of the process.

Additionally, tenants have identified issues that we missed during our turnover preparation that we can address immediately.  We fix items if necessary and document them on the walkthru form as resolved upon move-in.

Roofing is the biggest pain point.  We do most of the remaining work ourselves.   But I do not like to drywall, plaster and paint so I will hire others to do these jobs.

@Chris C. - I resolved this type of issue in my leases.  I do not include appliances in the lease but I let them borrow them with the expectation that they will be turned over to me in the same condition less normal wear and tear.  They also have the option to bring in their own appliances if they so desire.  This has eliminated all arguments with appliances as well as my repair costs.

Note that this does allow me to charge them (from security deposit) for any repairs to the appliances when they move out if they did not make the needed repairs during their tenancy.

Below is the clause that I have been using and it has held up in court in Indianapolis:

______________ ______________ ______________ 

Appliances - The appliances have been supplied in complete working order. Appliances included are a refrigerator and gas stove. The use of these appliances is not included in the rent. If Tenants wish to use these appliances, they agree to assume all responsibility for care and maintenance. Tenants agree to return the appliances in the condition supplied less any normal and reasonable use. If Tenants wish to use their own appliances, they may request that the owners’ appliance(s) be removed from the premises. Initials verify that the Tenants understand this paragraph.

Our pains are not that bad....

1. Turnovers - we focus on having long-term tenants.  Most of our tenants are 3+ years.
2. Late Payment of rent - chasing the tenant for the money
3. Normal Maintenance - I wish everything was maintenance free!

We used to have issues with bad tenants and evictions.  Once we implemented our rental criteria (set very high) and stuck to it, our tenant quality has increased and our pains have decreased.  Bigger pockets community has definitely helped us to become better self-managing owners.