All Forum Posts by: Michele Fischer

I know there have been delays and issues during government shutdowns but this is a new one for me.  Hopefully it is temporary and they will get caught up.  An interesting conundrum about how/when to start eviction proceedings though, if it comes to that.  Or even interesting to think about the ability to charge late fees.  Our state law states "An owner may impose a reasonablelate fee for each month an occupant does not pay rent when due." HUD is not an accupant. I'd be letting my tenant know that their goverment is failing them.

I would be inclined to not hold on to a cash flow negative property, I see our costs only going up.  But, since you only lived in it for a year, you will have to pay capital gains.  Do you have the option to move back into it for another year?  Or, can you 1031 it sooner into a better suited rental?  Agree that it is better to stop the bleeding, rent it at the lower rent with a term to end in a hopefully more favorable renewal time.  

Interesting topic.

We had a long term tenant who went from taking good care of the unit to letting it become a pigsty inside and out.  She was having significant anxiety and personal problems and once she lost control of it she could not regain any ground.  She had too many belongings and it is really hard to quantify clutter much less cleanliness.

This to say that one deep cleaning may help get them on track, on-going visits may be successful, or you may need different tenants because a lot of people don't know how to clean.

You've gotten some great advice.  The only thing I would add is using your time with prospective tenants to ask what they are looking for, how the unit aligns or doesn't to what they are looking for, etc.  "What do you like about it"  "What do you wish was different?"  Don't be obnoxious, but a few open ended questions may give you good insight into what your unit may be lacking and what people do like about it, to help drive future upgrades and marketing, and maybe help compensate for a shortcoming in the short term too.

Congrats on becoming a landlord, welcome to the "party"!

If I were you, I would be firm with needing rent more timely, I would still contact the male because she can't kick him off the lease, and I would have a conversation with her along the lines of "this is clearly not what either of us signed up for, is clearly not working, and what can we do to get you to a lower cost living situation as soon as possible?"  Work with her on that.  It may be overwhelming to her to think about moving but you might be able to easily make some aspects of it easier depending on what feels heaviest to her.  Keep your goal in mind, a paying tenant, her or the next tenant.  You can also tell her that you are going to start the paper trail so that you don't get stuck with unpaid rent, but that it will be rescinded once she gets up to date on payments.  Be clear that you are not messing around, have some wiggle room and grace, but that you have bills to pay too.  You gave the mouse a cookie and now she is expecting you to give her the milk too.  You have every right to draw the line at the cookie only.  In truth you don't have a lot of power over when and if she pays, but you can and should use the power you have.

We have this clause in our agreement and we talk about it before they move in so that they are clear who the primary is and what that means. 

In the event that Tenants decide they no longer want to live together, ___________ will be considered the primary Tenant to make decisions about modifying or terminating tenancy. Deposits will not be returned (full or partial) until all tenants move out.

Do you have any clauses in the lease about cleanliness that they are breaking?  If so, issue a 30 day or whatever your area requires (with specific violations and expectations to improve) and plan to do another inspection.  Go from there based on the results.

We often tell tenants moving in that they can stay as long as they pay rent and follow the rules.  There is more to the contract than just paying rent on time.

Once you start an application cycle, keep your criteria the same through that same cycle.  You don't want any discrimination claims.

But before posting the next opening, think about your criteria and if you want to make any changes to it.  

Would you average the credit scores, or take the highest as long as the low one does not have anything alarming in the details?  I have always thought of income as combined.  Two wage earners are going to have an easier time making rent than a family where there is only one paycheck, depending on how high such paychecks are, and in both cases you would look at the total household income.

Stick to your guns on what you said you wanted, but when you are not in the heat of the situation reevaluate your standards to make sure they are still serving you well.  Don't get sucked in to borderline applicants, make it as black and white as you can so you can approve or turn down with confidence.  I use a scoring system where applicants gain and lose points and their total either meets or falls short of my established line in the sand.

Hi Jose.

My properties are currently with PM's, but all of our properties are D class so I might be able to provide some insight.

With D class, a lot of people don't have credit or even bank accounts, and anything on-line that they can't easily do on their phone isn't going to work.  We still ran credit, to check for evictions and to see address history.  We would pay for the screening.  It is a minor expense to get more completed applications to choose from.

Is it just you?

My husband and I would divide and conquer.  He would chase leads, show the units, and try to get completed applications turned in.  Ours were not electronic, they would fill them out at the property if they were interested, or drop them by later.  Not everyone was and that is normal.  We tried to do the showings open house style, "I'll be there 10-noon today and 2-4pm tomorrow, stop by."

Once we got a completed application, it would go to me and I would process them in order as fast as I can.  Once we offer the unit to someone we let all other applicants know it is rented, even the ones that didn't qualify.

Using checklists and staying organized is key to staying on top of things and not having any discrimination issues.  Find a centralized place to keep track of information you know about interested parties and can make sure you are moving them forward through the process.

Good luck!

It is so difficult to police and enforce guests, I would focus on the increased water bill.  If you can concretly tie increased usage to that unit, I would give a notice that rent is increasing due to excessive use. You can offer to lower it if it goes back down.  

Water is a headscratcher for me.  Units with washer and dryer have less water usage than those without.  Units with more people have less water usage than smaller groups.  It all exploded since Covid.  Since they don't all go up, we do a maintenance inspeciton to ensure there is not a leak or running toilet then we increase rent to compensate.

You are getting good advice.

I would say that we evaluate market rent each year but if the increase would be less than $50/month we skip that year.

And we raise rent to the midpoint between current rent and market rent.  This leaves some increase on the table, but also makes it more likely that tenants won't leave over the rent increase.  As they look around, if they do, they will not find a better price and it is easier to stay.

We also make sure we are consistent across tenants each year.  We can't treat good tenants differently or raise some and not others.  We document what we did each cycle and why we did or didn't consistently apply our logic.

And, of course, as much as turnover is a pain, it is a great opportunity to bump up to market rate.

Different landlords have different philosophies, but this is ours.