All Forum Posts by: James Kirby

@Frank Chin WOW - New York must be a seperate beast. I love your analogy and it makes perfect sense. I may have to try that out here as well and see what I get. 

I am interested to know (if you dont mind sharing) what your vacancy rate is and what term leases you are signing?

My fear is here that one may say that I never accepted their application and base it on a descrimination issue or what not. By charging the fee (even if I refund it later) I have that receipt to show that the application was received and can send a denial letter for any reason along with a refund, even if its just that their application was not processed beyond the pre-screening.

I also fear that not having a fee allows any applicant to apply to any rentals they want without having any care of what unit they end up getting. Therefor when I accept that application and pay the fee and deny everyone else they then tell me that they have another place already or have changed their mind. By having to pay a nominal fee (even if I refund it upon a successful lease agreement) they have a little skin in the game.

Your thoughts? 

@Michael Noto I was thinking the same thing. I found that most in the area are charging between 25-40 for their application fee's. Mine may end up being just a bit higher due to the rentals that I have seen in the area vs. what I want mine to be!

I am in no way saying that I have nor do I want Luxury rentals. However, I do want to be known for Quality Rentals with Quality Tenants. I reckon its kind of a learn as you go game.

@Randy Ferguson, I wish you the best of luck. Congradulations!!! Here's to many, many more great investments.

@Mike McCarthy, I appreciate the advice. I will make sure to accept every application to ensure that I eliminate any discrimination issues as well. I just dont like the fact that there are often times that a credit check and criminal background check may come back "okay" but personal references and/or employment doesn't match up to what they say. I feel that the time I spent on the research is time I could have spent elsewhere and paying someone else could easily run $10 an hour to scan through these applicants.

I feel that if the applicant is comfortable with the information they gave us I am actually doing them a favor for the $10 to save them $40 up front. However, Maybe it would be worth what @David Stone mentioned in charging it all up front and run the check first to weed out the ones I dont need to scan through and still have the funds there to do the research if needed.

Do you ever refund any of the fee? I have read in a couple of different posts that others do. I cant fully wrap my head around why but if its the in thing I reckon I am behind in times. 

Also, do you think a $50.00 application fee is too steep? After all, you guys/gals out there know how much work goes into finding a decent tenant.

I truly appreciate your help in this.

Hello Everyone,

      I am new to investment properties and I am currently in the process of closing on my first multi-unit property. I have been doing a lot of research on everything over the past several months and have a quick question on the Application Fees. I feel as though a lot of my time can be consumed by having the prospective tenants filling out applications and then having me screen the application (contacting previous landlords, employer, personal references, etc.) and only charging them for the credit and criminal background check. The question's that I have are:

1. Is it legal to charge them a $10 application fee (to cover a portion of my time) plus have them pay for their credit and criminal background check if they pass my screening ($40 through SmartMove)? (I can't find anything about the legality of application fees in Utah)

2. Does that sound harsh or uncalled for?

3. I have read other posts where all or part of the application fees have been given back to approved tenants that accept and sign the lease agreement. Is this something that you would do? If so, why? and how much would you recommend crediting back?

Thank you in advance for your time.

I wanted to post my findings here to help out the next investors that may be asking this same question(s).

1. The replies above are honest and very helpful. Please take the time to read thru them and the links they provided. 

2. This may be one of the hardest things you have to do as an investor to help protect YOUR investment. It may also be one of the easiest to do as well, if the situation is or gets bad enough.

3. Remember that your tenants are/should not be thought of as friends. Maybe more so as a great emploee that you enjoy working with and want to help within the guidelines of rules that are set (YOUR contract). Dont bend them or the others will expect the same and courts can also frown against it. Besides, do you like being taken advantage of? I dont. 

4. Since you view them as an employee you must set standards as to when to "train" them to perform the job duties (rules) that YOU made. If it's something simple document it in writing (follow your state/city) laws. If it's something that is a zero tolerance then follow through with the eviction. YOUR company will only be as successful as you train others to perform. Keep everything!!!

5. Notice I am using "YOU" and "YOURS" a lot. It's because nobody is going to care about you, your tenants, or your investment property as much as YOU should.

6. Ask questions, a lot of questions, maybe to several people for different takes on what you are looking at doing. The old saying is "There's more than one way to skin a cat". Everyone has their own way of doing things and there are so many successful people here, it's easy to find your answers or get someone willing to answer your question.

7. Thank Everyone. Even if you think their advice is trash, thank them and move on. Maybe later you'll end up using what they say or maybe it will remind you of what not to do. Everyone's time is worth money. They are kind enough to spend it with you, the least you can do is say Thanks.

Landlording on Autipilot by Mike Butler was an excellent read on this. When you treat your tenants as an employee and you care enough about your investments, you will care enough to do visits to the property and follow whatever step is necessary. You do what you can to get them "hired" into your property and it's their job to care enough to stay. Its your job to keep them there by taking care of your investment as necessary. A happy tenant is more likely to take care of your property than one you don't check in on or maintain. After all if you dont care why should they?

I hope this helps.

 Thank you sir. This will help. 

@James Wise Thanks for the read it makes me feel a bit better about my decision.

@Tim Herman It's not that I cant or wont do what needs to be done, as stated in the question, is there anything that has helped you (or others) make this easier. Toughen your skin so to speak.

Hello all,

     I'm in the process of purchasing my first rental property (4 plex). I will need to live in one of the units with the loan I am getting. From my walkthrough there are two units that just won't fly with the way they are being taken care of by the tenants. 

1. Smoking in the unit

2. Chandelier hanging above kitchen sink spliced into an extension cord for power. 

3. Just overall care of the units in general.

These tenants are in month to month leases. 

I am known as a Big Teddy Bear and at times a push over. Do any of you have any advice on how to get it through my thick skull that it's okay to evict these people I don't know? Any podcasts, books, etc. Please don't just say toughen up. This is an honest question.