All Forum Posts by: Greg Weik

What @Drew Sygit said.  The lease is always between the tenant and the landlord, you are acting merely as the agent.  Make sure you understand your state's laws about what type of disclosure(s) you need to include regarding your role as the agent. 

Hi @Aubrey P., from what I've read, the proposal will be more transparent, not less-so. 

I don't personally see any "racial inequity" in the current credit reporting system, as seems to be the claimed premise behind the proposed change, but more transparency is generally better. 

In any case, the proposed changes are looking unlikely in the short term - they are talking about a 7-year phase in, if it even happens.  

From my reading:  "The plan calls for a public credit reporting agency to be set up within the CFPB. This agency would develop algorithms that would negate the impact of past discrimination, make credit scoring more transparent (currently, credit scoring models are proprietary and consumers don’t know exactly how they are scored), make the dispute resolution process more accountable and also enable data security.

Under Biden’s proposal, which would phase out the existing private credit bureaus over a seven-year period, adverse input from medical debt and delinquencies on predatory loans would not make its way onto credit reports and the scoring process. And adverse input would only be reflected on a credit report for a four-year period, rather than today’s typical seven years."

I think you need a better lease or a property manager.

You should never put the onus on tenants breaking their lease to market for new tenants. 

Just add an ITF (Improper Termination Fee), usually the amount of the security deposit plus the amount of one month's rent.  Check TX state law to see if there's a cap on what the ITF can be.  Most states will deem clauses such as "rent must be paid through the end of the lease term" to be unenforceable because they create an incentive for landlords to not attempt to find new tenants.  

As to your tenants breaking their lease, once they vacate, make the security deposit claim and threaten to send them to collections for any balance owed (if you so choose, depends on the condition and how quickly you can get it re-rented.)

In our world, landlords normally end up in a better financial situation when tenants break their lease, due to our lease ITF and quick turnaround.  Time is money, don't spend more than you have to on situations like this. 

Hey @Brandon Obrien, the "no contact with the tenant" clause is reasonable and common.  We have one and we will cancel with a client who does not abide by those terms.  I've been doing this a long time and any client that goes behind our back to talk with the tenant is throwing a wrench into professional property management.  Here's what goes down if the landlord and tenant can talk:

-Tenant tells the landlord how wonderful the tenant is.  Tenant indicates "improvements" they've done to the home and how they want to stay forever. 

-Tenant likely tries to throw PM under the bus - not because PM is doing a bad job, but because the tenant knows that landlord is far likely to be sympathetic to things like late rent, adding a puppy, breaking the lease later, etc.  Tenants often try to pit the landlord against the PM.  

-Landlord may tell the tenant they can do alteration(s) that tenant requested, even though said alterations are high-liability actions, such as repairing a deck, finishing a basement, etc.  The tenant may have convinced the landlord they are a "contractor" and happy to do these things.  The landlord has no idea what the implications are from a legal standpoint, what the lease says, etc.  The landlord just sees "free improvements" and gets excited. 

-Tenant tells the landlord they are going to be late, landlord "forgets" to tell the PM, who has to go post a demand notice and PM has to follow up with the tenant only to find that the landlord "allowed" this lease violation, undermining the property management company. 

There are so many instances like the ones above that I've personally witnessed that it's not worth typing all of them here.  If you want to self-manage, then self-manage.  But don't hire a professional PM company and then try to backend the process by communicating with your tenant. 

As for not providing you with their management agreement, that's very suspect.  They should be proud to send it over to you even without your requesting it.  Transparency is extremely important in the property management world - find a PM who shoots straight and has nothing to hide and who isn't just trying to "sell you" on the spot. 

I think it depends.  Do you like your tenants? 

I also have 3 SFR rentals and I like my tenants. Annual lease renewal inspections indicate they all take great care of the properties and they pay on time. Therefore, no rental increases. If I had tenants who were a pain, didn't take care of the property, whined about every little thing, and I didn't care if they moved out, I would make sure rental increases match the market.

I disagree with @Joe Splitrock that tenants are expecting rental increases.  The 500 doors and nearly 15 years of experience I have doing this suggests that many - possibly most - tenants (especially good ones) do not expect rental increases.  We've had plenty of tenants move out over the principle of a rent increase, especially if what they are currently paying is within market parameters.  My clients have the power to overrule our recommendations on lease renewal rates, and often doing so is at their peril. 

There is more to life than squeezing every penny from your investment property.  Tenants have costs that go up too, and their income doesn't always keep up.  The renter class is widely varied, but these are not high net worth individuals.  If you're a landlord who can give a good tenant a break in the form of the same rent each year, then I say do it.  

It's not "business" to your tenants, after all.  

"KetoWave: After 1 cup of this before bedtime, your body will burn fat like crazy! rdula.me/F2RyywhEll Recommended by SharkTank Judges!"

KetoWave, who knew?!  Well, obviously, I mean besides the Shark Tank judges. 

In all seriousness, yes, stop spamming people.  The text message is the last sacred medium of communication! 

Hi @James H., Propertyware does all of those things and is a scalable solution.  You purchase tiers for the monthly subscription and it's reasonably priced for what it does. 

We use to run Buildium, but that software pales in comparison (for many reasons) - we've been using Propertyware now for about 10 years and it works well.  One of the things I like the most about it, is the customization aspect.  You can create custom fields for any property, and the ability to track maintenance and other notes is really useful.  

Where did @Jacob Stokes go?!

@Nick Scullin I actually would have the opposite concern with lower rental rates.  The people in the Denver area (and, I suspect, most metro areas) who can afford $2200-$2800 tend to have more stable jobs. It is a really important part of the screening process - knowing what you're looking at when verifying income and employment. 

One of my tenants is a truck driver (pretty stable, at least before the autonomous trucks go online!), one couple works in insurance and property management (two of the most stable industries), and another is a couple with a brother where all 3 have income.  

Those are just my personal properties, but in our managed portfolio of other people's properties, the small handful of unpaid rents are from self-employed tenants and a guy who worked in construction.  

Just be careful also, in Colorado and probably other states, you can't discriminate based on the source of income.  If someone comes to us as a server in a restaurant, we can't ask for a larger security deposit even though we know their source of income is higher-risk.  Like a lot of bad legislation, this was designed to keep landlords from avoiding Section 8 tenants, but now that we've seen what a pandemic can do to certain industries, that could make finding the right tenant more difficult. 

I think your head is in the right place and more expensive is better (within the parameters of the variables you alluded to), for exactly the reasons stated.  Higher rents and more realized gain in equity.  

To put it another way, 2, $200k duplexes vs. 1, $400k duplex.  The cashflow math might suggest the 2 duplex option, but that is usually missing the forest for the trees.  Two sets of systems (HVAC, appliances, plumbing, etc.), 2 sets of tenants and possible tenant issues, etc.  I usually explain it in the "5, $100k condos or 1, $500k house" - and most people think the 5, $100k condo is the smarter play, but they are mistaken. 

I personally go for higher-end single-family homes that rent near the top of the market, but still at a price point where there are a lot of qualified renters.