All Forum Posts by: Michele Fischer

Personally, I would not keep a rental that is not expected to cash flow. Additional costs will creep in and costs seem to go up faster than rents, so I would sell and try to otherwise optimize the VA loan. I would also not have a 5 bedroom rental. In my area these are rare so they are difficult to set market rent, and I imagine get a lot of wear and tear with a lot of occupants living there. That's my two cents, I'm sure there are other views.

Agree it is difficult to assess costs when they vary so much by location.

Keep in mind that some turnovers are sickenly expensive, and that is just the nature of the business.  Evaluate the situation to see if you could have done anything differently to mitigate the loss and implement changes to your processes, but know that this happens and hoepfully just not too close together.  This is the heart of the reason housing isn't mroe affordable, that landlords bear these types of costs every day.

You could probably find cheaper labor, especially to haul away the junk, but not easily as an out of state investor.  As far as the bedbug cost, I would consider how long you are willing to let the place sit empty.  If you can get all the bedbug containing furniture out of the place and it will sit for awhile (or let it sit while the other repairs are done) you may be able to avoid some cost, but if you want to get a paying tenant in sooner rather than later you will want to bite the bullet and get it well done.

This is our boilerplate language:

Insurance: Tenant should obtain a renters’ policy of insurance on their personal property. The tenant understands that the property of the Tenant is not insured by the landlord for damage or loss of any kind (action of third party, fire, water, theft, vandalism, storm, heat or cold, electrical damage, pests, mold, accident, etc.), and the Landlord assumes no liability for such loss. Landlord will promptly respond to Tenant request for repairs but will not be monetarily responsible for tenant disruptions or inconveniences during habitable times of repairs or tenant/guest injuries incurred in or around obvious areas of maintenance, repairs, or construction.

We are more converned about them expecting us to pay for their losses rather than getting recouped for damages to our property.  We don't rely on insurance, they love to deny.

These requirements are solid, keep them:

• Application: Everyone aged 18 or older must complete an application.
• Screening: Includes income verification and rental history verification.
• Eviction History: No prior evictions are permitted.

Requirements to consider:

• Background and Credit Check: A clear background and credit check is required. Think hard about your criminal background criteria. First, it may be discriminatory. Second, people with criminal records are in need of housing and have made great tenants for us. We look at how many counts and how long ago. We also disallow Level 1 sex offenders to the extent we are legally allowed to.
• Income: Verified monthly income must be at least three times the rent (minimum $4,200 combined). Our sweet spot for our depressed are is rent 28%-31% of income. Rent cannot be more than 50% of income, 59% if it is non-taxable income.
• Credit Score: A credit score of 650 or higher is required. We do not use the credit score, we use the information on the credit report to gauge how long they have lived at addresses and what kind of judgements they have. Of course they are going to have bad credit or they would be looking in a better area.

Another thing you may want to consider to drive more applications is to not charge the application fee. We have never collected that and it is not a significant cost.

Also be very careful changing criteria mid stream, I would only change it between vacancies.  Someone could claim you discriminated if you rejected them or implied you woudl then do something different for someone else.

Hope this helps.

We only address power outages, as such:

Landlord is not liable for any interruption or malfunction of service. Tenants may not occupy residence without utility service except during brief interruptions beyond your control.

We have always had the philosophy to do the right thing.  One year many pipes froze in our city, including one of our rentals and our personal residence.  We offered our impacted tenants a hotel room while we were awaiting repairs, but both tenants decided it was easier to stay put.  It may not be required, but we are generally in a better place to absorb the loss than our tenants.

Some sites are not able to provide back a credit score, because they don't know how you will handle the data.  Applicant credit scores should be treated with a high level of care and should not be handed out when they aren't assured that you are locking them up and taking due care with private and sensitive data.

So, many places, including the screening company we used for years before moving to a PM, provide a suitability score rather than the actual credit score.  It served us well, along with the other detailed information they could provide, to make an informed decision.  If you use different sources it will be difficult to calibrate the different scores, but think of it as a percentage of the max available score.

This particular score seems to be based on an applicant's credit history, including payment history, credit utilization, and credit availability.  None of this directly relates to landlords reporting rent payments.  It indirectly impacts the credit score, which would be included in either metric.

Red flags all the way around.  Maybe the landlord isn't responding because they don't see the applicant as meeting their criteria.  Maybe the landlord works a normal job on top of landlording or otherwise has a lot going on.  Maybe they are overwhelmed with interest.  Maybe they are bad communicators.

Assuming you still want the place, I would do anything you want to reach out via the renal address or professional websites, but home addresses and personal social media is going too far.

Most of our tenants do not want to schedule a move out inspection.  We always offer.

We take photos before move in, for us not the tenant.  Photos of how good the place looks, with a lot of close up and far out photos, not just of the documented issues.  We just put them in a folder by address and date.  And we rarely need to use them.

Tenants sign and initial each page of the condition report at signing, we quickly go through the property and let them take as long as they want.

Ideally at move out they would sign the condition report, but this is nor normally done.  And more photos taken, same photos, and extra photos of any damage.

There's not a good reason to not ask for the allowed rent, the tenants portion generally is based on a percentage of their income not a percentage of rent.  The allowed rent amount should be pegged to market rent, so it would only be way off if your unit is a way different quality or neighborhood compared to average.  But remember that what is favorable now could come unfavorable in the future as they readjust over time.

Reasons many landlords avoid vouchers include the hassle of the extra inspections, the perception of a worse tenant, and maybe the inconvenience of getting rent from two different parties.  Much less frequent, but we also weren't allowed to participate while my husband was a housing commissioner, as it would have been a conflict of interest.

I'm managing D class properties with a property manager and am making a profit.  Last year was the first and only year we had a negative cash flow, and that is driven by the anti-landlord west coast sentiment.  

But we invested several years of blood sweat and tears to get things stabilized and learn the space before we turned them over to property managers.  And I will be the first to admit that it is not for everyone.  And we went in eyes wide open, intentionally inveting in class D, not sliding into it as demographics changed.  The property manager can make or break you, it has to be a PM that is working in that space and is comfortable there.

I agree with earlier comments to look in the front and back yards to see how many old cars, abandoned junk, or treasures that aren't treasures are piling up.  Also try to get a guage on how much people are out and about and living on their front porches.  Class C stay indoors, don't answer the door for solicitors, and don't spend a lot of time with neighbors.  Class D is mostly rentals (another tip to look at owner occupied stats and/or if the neighborhood is identified for revitalization), the tenants are outside smoking, they are talking to neighbors and solicitors, it is a completely different vibe that is pretty noticeable just driving through.