All Forum Posts by: Marcia Maynard

Anything's negotiable!

If all parties to the lease agree, you can terminate the current lease and enter into a new lease that includes the friend. This is much cleaner than doing an addendum.

Make sure all parties understand that the new tenant will be added to the lease as "jointly and severally liable" with the same rights and responsibilities as the current tenant. You may choose to raise the rent or change other terms of the rental agreement at this time as well.

Definitely require an application and background check of the friend. Cozy has worked well for us.

https://home.cozy.co

We're in a state that has legalized both medical and recreational marijuana.

As a landlord, I'm not required to allow smoking in our units or anywhere on the premises. Tenants may satisfy their medical needs in other ways, with liquids and edibles.

Smokers are not a protected class. Set your terms in your rental agreement/lease. 

Here's our No-Smoking Policy:

NO-SMOKING POLICY.Tenant acknowledges the premises are designated as smoke-free and agrees not to smoke and will not allow their family members or guests to smoke on the premises, either inside the unit or outside on adjoining grounds.Tenant agrees to abide by this no-smoking policy and to notify their guests and invitees of the policy as well.This includes smoking tobacco, marijuana, or any other substance, as well as vaping. If Tenant smokes/vapes or allows others to smoke/vape on the premises, Tenant agrees to pay a penalty fee of fifty dollars ($50) per violation.

Yes, I agree, it could be a niche market. There are many people who have a felony on their record, a result of bad decisions they made and/or legal processes that convicted them rightly or wrongly. They face a tremendous barrier to employment and housing. Even after they have turned their life around and have not re-offended.

Efforts to make felons a protected class have been ongoing in the employment arena for some time now. Will that spill over to housing? There's talk, but it hasn't taken hold. I see it as inherently different than other protected classes. It's not about who you are; it's about what you've done. 

It can be a risky class to rent to.  Some are drawn to the criminal lifestyle, some got on the wrong track for a only a short while, and some made one mistake that cost them dearly. The key seems to be what led to the felony, the type of felony, their age at the time, their incarceration history, when they got out, what they've done since, and the likelihood of recidivism. The risk-benefit of renting to this group certainly needs to be explored.  No-cause eviction is possible in our jurisdiction, so that's our exit plan if things go south. We can have someone out within 30 days if necessary. If I were in a jurisdiction where this wasn't possible, I'd think twice.

You need to know landlord-tenant law better than your tenants. Act swiftly, don't hesitate. The tenant has already shown they are a rule breaker and disrespectful of you and your property. 

No joking matter, you need a great attorney. A keen attorney can get this tenant out in record time and save you money in the long run. Serve the legal notices necessary to remove this tenant from your premises.

If you plan to be a landlord and self-manage your properties, prepare yourself for the learning curve. Decide now whether it's worth your time and energy to learn the trade, or whether hiring a great property manager is a better choice. Perhaps get a PM on board for now, while you decide what you really want to do moving forward.

Be professional and fair. Protect not only your investment.... but your home too!  I'd get on the pest problem immediately. Also, make sure you don't anger the tenant.  You don't want to face cement poured into a toilet or worse. Do what you can to reduce the risk of water damage and fire.  Negotiate a move-out plan that will give the tenant incentive to move-out quickly with the least amount of damage, but start with the proper serving of the legal notices in case the tenant doesn't move out voluntarily and chooses to stay through the eviction process.

Good luck!

It's good when people can be open and honest about their legal history. 

We don't automatically write off someone with a felony. Ask more questions.

Here's an excerpt from our rental criteria.

LEGAL/CRIMINAL HISTORY

1.Criminal offenses of a violent nature against either person or property will result in denial.

2.Applicants with a non-violent criminal misdemeanor that occurred more than two years ago or a non-violent criminal felony that occurred more than five years ago may be considered if restitution for their crime was made in full and all time was served.Also, we may require an additional security deposit and demonstration of good employment history, credit history, and rental history since the time of the crime.Multiple offenses may result in denial regardless of what the employment, credit and rental history shows.

Gotta have boots on the ground!

I agree with @Brandon Sturgill that eviction should be the absolute last resort. Start with terrific tenant screening, a solid well written rental agreement, and attend to matters in a timely, efficient, and professional manner. You need someone to regularly check on your property, provide periodic maintenance inspections, and connect with your tenants often to make sure their needs are met and they are upholding their part of the bargain.

If it gets to the point of actually evicting a tenant through the court system, better have a great attorney on your team. The best will be so fast and efficient, they can actually cost you less in the long run. If you are serious about your business, budget for proper legal representation and someone to look after your properties and tenants.

Did you establish clear rental criteria BEFORE you started to advertise and accept applications? That is key. Your rental criteria must comply with the laws for your jurisdiction, including non-discrimination laws.

Ask the same questions of each applicant. Review the applications against your established rental criteria.

Good rental criteria will cover Residence/Rental History, Income/Employment History, Financial/Credit History, and Legal/Criminal History. You will want to tailor your criteria to the type of property and market that you are in.

Here's an example of our rental criteria (which works in Washington State). We give each applicant a copy of this PRIOR to taking their application, so they can self eliminate if they don't meet our criteria. This saves time and money for both parties.

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RENTAL CRITERIA

GENERAL REQUIREMENTS

1.Each adult (18 years or older) must complete an application to rent and background check authorization form.

2.Each applicant must provide a valid government issued picture ID at time of application.

3.Each applicant must qualify individually or together with a co-applicant as a household.

4.An application fee of$40 per application must be paid prior to processing the application.

5.Occupancy is based on the number of bedrooms per unit.Maximum occupancy is two persons per bedroom.

6.No Pets - no pets allowed on the premises.

7.No Smoking - no smoking allowed on the premises.We will not rent to smokers.

8.No Drugs - no illegal drugs are allowed on the premises.We will not rent to illegal drug users.

9.No Firearms - firearms are not allowed openly on the premises.If a firearm is owned, it must be safely stored.

10.We conduct full background checks. We are willing to work with applicants who have made mistakes in the past or have a negative history.We may require additional security deposits to do so.

11.Inaccurate, false or misleading statements made verbally or on the application will result in denial.

12.If approved to rent, applicant must be able to pay first month rent, move-in processing fee, and security deposit at time of move-in.

RESIDENCE/RENTAL HISTORY

1.We will examine the most recent seven years of residence history.

2.Home ownership will be verified through the tax assessors office and/or credit report.

3.Rental history will be verified through the property owner and/or rental agent.

4.Rental history reflecting any unpaid past due rent, damages or fees will result in denial.

5.Rental history showing excessive property damage, excessive noise, or unruly behavior will result in denial.

6.Three or more notices for failure to pay rent and/or to comply with the terms of the rental agreement, within a 12 month period, will result in denial.

7.A person with an eviction or unlawful detainer on their record may be approved if full restitution has been made. We would require an additional security deposit as well to mitigate our risk. One eviction only. Multiple evictions will result in denial.

8.Long term rental history or home ownership is favorable.Residence history that shows an excessive number of moves within the last seven years will require additional security deposit.

9.If residency was out of state within the last five years, an additional fee may be necessary to conduct an out of state background check.

INCOME/EMPLOYMENT HISTORY

1.We will examine the most recent two years of income history.We will not consider unverifiable income.

2.We require sufficient and stable sources of income, equal to at least 3x the monthly rent.We will consider income that is 2.5x the monthly rent with additional security deposit.

3.To verify income, we may request documentation such as pay stubs, benefit award letters, bank statements, retirement accounts, and tax returns.

4.Long term employment history in the same job or profession is favorable.

5.Short term, temporary or seasonal employment may qualify with additional security deposit.

6.Self-employed individuals must be able to verify their income through tax returns or bank statements.

7.Retired and unemployed individuals must be able to demonstrate they have sufficient resources to pay living expenses.

FINANCIAL/CREDIT HISTORY

1.No outstanding debt to previous rental property owners.

2.No outstanding debt to utility companies.

3.No outstanding debt in excess of $1000 that is not in a payment plan.

4.No excessive monthly financial obligations - more than 20% of income.

5.Lack of credit history or marginal credit history may result in additional security deposit.

6.Derogatory credit (past due accounts, collections, charge off accounts, tax liens, judgements in excess of $1000 and/or bankruptcy) may result in additional security deposit or denial.

LEGAL/CRIMINAL HISTORY

1.Criminal offenses of a violent nature against either person or property will result in denial.

2.Applicants with a non-violent criminal misdemeanor that occurred more than two years ago or a non-violent criminal felony that occurred more than five years ago may be considered if restitution for their crime was made in full and all time was served.Also, we may require an additional security deposit and demonstration of good employment history, credit history, and rental history since the time of the crime.Multiple offenses may result in denial regardless of what the employment, credit and rental history shows.

If you use an enclosure, be sure to have a clause in your rental agreement about not burning candles near it. A romantic bubble bath by candlelight burned an acrylic enclosure we had and the the r/r cost was significant!

We like doing tile now for our buy and hold properties. Tile is more attractive. We use the new kind of grout that doesn't require as much maintenance. The plastic/acrylic shower surrounds start looking bad sooner than the tile enclosures do.  However, I'm amazed with the improvements in the industry. Some new products take on the look and durability of tile.

Check to see which utilities become a lien on the property if not paid. These are likely the ones that the HOA is concerned about. It's not uncommon for garbage and water/sewer to fall into this category. I'd factor those into the rent.

For utilities that chase the tenant if not paid, such is often the case with electric and natural gas, require the tenants to establish service in their name and pay for it separately. If the water/sewer is separately metered, then have the tenants pay for that separately as well, since the cost can vary significantly depending on the usage.

Most lenders will require you to put the property in your personal name if you want a conventional loan (better terms) instead of a commercial loan. Even having your properties in an LLC won't provide liability protection if facing a lawsuit led by a terrific attorney, as these shields can be pierced. Best way to protect your interests is with good management techniques and great insurance. I'd go with putting the properties in your own name and getting the best terms you can for financing. If the property is later paid off and you don't plan to refinance it, then put it into the name of the LLC if you wish. If you scale up and want to put all your properties into the name of the LLC, then be prepared to go commercial. Each time you change the property ownership from your personal name to the LLC, or vice versa, be prepared to pay a recording fee with the title company.