All Forum Posts by: Marcia Maynard

Joe,

It is a vintage home from the 1940s that we brought back to it's original charm. The original wood floors were in good shape and we had them professionally refinished. However, the floors are a soft wood, not a hard wood. The psi (pounds per square inch) from the tip of a stiletto high heel shoe was too great. Haven't had problems with this wood floor prior or since, just no more stilettos please!

Two notes to chime in on....

1. First, we purposefully write our legal agreements as separate documents, based on what is generally needed in court or what needs to be saved for 7 years and what needs to be saved forever. We only had to file in court once and the core rental agreement is the only thing the attorney needed to take with him.

Certain legal rights can not be waived by a tenant signing a rental agreement.

Our property rules are presented in an addendum. If the tenant is a habitual rule breaker, we can terminate the tenancy fairly easy and move on. This is because in Washington State (except in King County - Seattle area) landlord-tenant law allows us to serve a 20-day no-cause notice to terminate, just as a tenant can give us a 20-day no-reason notice to vacate.

2. Secondly, we maintain a shoeless household in our own home, see the value of it and wish others did too. But it is not realistic to expect others to do so and could not be enforced. For good reasons as stated above, not everyone can go without shoes. For safety reasons many service providers (health care workers, trades people, etc) are trained not to take off their shoes.

That said, problems do occur with tenants who choose footwear that causes damage. One of our petite tenants loved stiletto shoes and did a lot of damage to our newly finished wood floors in short time, pock marks everywhere! One might consider furnishing area rugs for high traffic areas to protect wood floors. We wanted to keep the original flooring in that vintage home, but now understand the trade off in doing so.

Here is an excerpt from our property rules that you might find helpful...

FLOOR CARE: Tenant agrees to vacuum all carpets and clean all hard surface floors on a regular basis, or have such done by another party. Carpets and other flooring dirty quicker and wear out faster when outside footwear in worn indoors. Tenant agrees to provide extra cleaning if outdoor footwear is worn inside the residence.

We are buy and hold investors too and strive for good cash flow. In addition to saving for capital expenditures and saving for hard times, it is important to mitigate risk.

Have good insurance in place. Especially liability. We put our properties into LLCs. We maintain a one million dollar umbrella policy. We maintain appropriate fire insurance. We look for opportunities to improve our properties to reduce risk and attract better tenants.

Have cash readily available. Our personal home and most of our rental properties are paid off, so that helps. Our personal liquid savings is 10 times our monthly personal expenses. Our business liquid savings is 6 times our monthly business expenses. And for emergency use only, we maintain a $100,000 home equity line of credit. We will not touch our 401(k), 403(b) or IRAs before retirement, lot's of penalties if you do and tax consequences too. We have both personal and business credit cards that we use often (lots of frequent flyer miles!), but we pay them off each month so we never carry a balance.

Risk tolerance has a lot to do with it. The older I get the less risk I take.

What do you do when a tenant dies on your property? Or dies elsewhere and never returns to your property? Especially when they live alone. In an effort to be proactive, I'm trying to think through scenarios and set some procedures in place. I'd like to hear about your experiences and thoughts. Thank you.

From the telephone screening...

Me: Have you ever been evicted?

Him: Yeah, gobs of times!

Me: [Already seeing this in the unlawful detainer book printed by our county rental association - his name listed seven times in less than one year.] Thank you for your honesty. But we can't rent to you. You don't meet our minimum criteria.

Him: Okay! Have a nice day!

Our "Property Rules" addendum to the rental agreement is now 39 items long, and yes the list grows when something unthinkable happens. I put it in alphabetical order and present it as an easy reference guide for tenants to use.

Here are a few:

CANDLES: Tenant agrees to take safety precautions when burning candles. to use proper candleholders to catch all drippings and prevent burns, to not burn candles close to flammable materials, and to not leave burning candles unattended.

[Case Study: Our bubble bath loving tenant who burned tea candles in the soap dish of a plastic tub surround and burned a hole through it. Our non-utility paying tenant who used candles instead of electricity and set one burning below a kitchen cabinet- we now have a flame tattoo on the underside of that cabinet- we moved that tenant out and rented the unit to two firemen.]

CARPET CARE: Tenant agrees to maintain carpet with regular vacuuming. If liquid spills on the carpet, Tenant agrees to immediately blot the spot clean with a clean cloth and to consult with Landlord for further cleaning instructions. Tenant agrees not to use carpet cleaning machines that add water to the carpet, as most consumer equipment can not adequately remove water that goes into the carpet and more damage is likely to result.

[Case Study: Remember the spot from "The Cat In The Hat Comes Back"? We had one of those ink spots that grew and grew and grew when the tenant's friend loaned her a vacuum type carpet cleaning machine. Another tenant used so much spot cleaner, dishwashing liquid and who knows what else to clean carpet stains that when the turn over happened our professional carpet cleaners equipment pulled up bubbles and bubbles and bubbles! At move in, we now give tenants a bottle of our favorite carpet spot cleaner and show them how to use it.]

CUTTING BOARDS: When using cutting utensils, Tenant agrees to make appropriate use of a cutting board, so as to not damage countertops and other surfaces.

[Case Study: Common sense is not common, I'm sure everyone has seen this. We now give tenants a cutting board at move in and we rarely see this kind of damage any more. Who wants to prepare food on one of those pull out wooden cutting boards in an old rental unit anyway?]

FEEDING ANIMALS OUTSIDE: Tenant agrees to refrain from feeding stray animals and from leaving food outside for animals, as this can attract stray pets, wild animals, and insects to the property. Bird feeders are allowed, but should be at a sufficient distance as to lessen the chances of bird droppings falling on fences and other property.

[Case Study: If you have a tenant who feeds the animal world, you will be amazed how many cats there are in a neighborhood, not to mention raccoons. A neighbor put dog food out to attract those "cute" raccoons (we counted 14 on her porch at one time), then a bobcat started hanging around the property to feed off the raccoons! They had to hire a professional game hunter to trap the bobcat.]

When the new tenant moves in, we present them with a gift that is basically a starter kit of cleaning products and other items that help protect our property from damage. The tenants don't expect it and are quite appreciative. The WOW! factor starts the tenancy out well. It also gives emphasis to the idea of CLEAN.

Plastic Cleaning Bucket: Awesome degreaser, Woolite carpet spot cleaner, white vinegar, baking soda, tub/shower cleaner, Magic Eraser.

Reusable Shopping Tote: cutting board, kitchen garbage bags, picture hooks, dishwasher detergent or dish washing liquid, shower curtain liner, plunger, door mat.

The liquid hand soap, toilet paper, paper towels and Clorox wipes that I brought during the turnover are left for the tenant to use.

We present the rental agreement in a folio that the tenant keeps. In the folio we also have a welcome letter with important contact numbers, an emergency preparedness brochure, instructions on how to use a fireplace, recycling instructions, information about the nearest urgency care clinic, a walking map of the area from the chamber of commerce, etc.

The appliance user manuals and fire extinguishers are included as items that stay with the property for tenants to use as needed. We demonstrate all appliances and talk about fire safety, using information from our local fire marshall.

We use turn-over check lists for cleaning, maintenance/repair and upgrades.

Years ago, a couple of guys on our maintenance team thought I was nuts for cleaning an apartment before all the repairs, painting, upgrades, etc were done. I do a first "general" cleaning early on and a second "detail" cleaning at the end, just before the carpets get professionally cleaned. I asked the guys, wouldn't you rather have a clean toilet and sink to use and a clean refrigerator for storing your lunch and beverages? Wouldn't you rather work in a clean environment and be able to see past the grime? Enough said. Never heard a peep about it since.

There are a few things I like to have at the vacant unit during the turnover. Here's the list: liquid hand soap, paper towels, kleenex, toilet paper, plunger, blue paper shop towels, canister of clorox wipes, first aid kit, large garbage can, large garbage bags, flashlight, step stool, contractor's roll of paper for floor protection, handyman tool kit, bottled water for the crew, N95 respirators, hearing protection ear muffs, cleaning gloves, work gloves, safety glasses, cleaning supplies caddy, repair supplies caddy, inspection tools caddy, shop vac, broom, light bulbs. The workers bring their own tools for specific jobs they do. We provide the materials necessary for those jobs.

We've had great success with Section 8 tenants. Establish a good relationship with the case managers at your local Housing Authority and it will pay off. The Section 8 tenants have a lot to lose if they don't follow the terms of the rental agreement, so they are motivated to uphold their end. If they don't, their case manager can give them a nudge.

We especially like receiving the HA portion of rent by direct deposit and it always arrives before rent is due, sweet. Our section 8 tenants pay their part of the rent on time too.

Something to keep in mind, the Housing Authority will do periodic inspections of your property. That is no problem as long as you keep up on your maintenance. We do seasonal inspections of all our properties in the spring and in the fall. We also do extra inspections if a tenant becomes troublesome.

We thought one of our properties was in good shape as it always passed the HA inspection, so we didn't inspect it as often as we should have. We found out later that one of the HA inspectors would just ask the tenant if there were any problems, if the tenant said their were none, the inspector would sign the papers and move on to the next property. The result was an under the sink water leak that went undetected for too long. We have come to appreciate the HA inspectors who do a thorough job.

Our experience shows the Section 8 tenants do have longer tenancies. At this time, we have three Section 8 tenants. Length of tenancy - 25 yrs, 21 yrs, and 12 yrs. Another one that moved out a couple of years ago had 6 yrs. Not too shabby!

It's a good idea to have your phone screening questions well thought out in advance and written down. Pay attention to non-discrimination laws. We do a quick eight question screening that weeds out most undesirables and people who don't meet our minimum criteria. (5-10 minutes) If they pass that, then we follow-up with a pre-qualification interview of about 20 questions. (15 - 30 minutes) If they pass that, then we show the property.

At the start of the interview, I ask for the full legal name of all adults who will be residing at the place. While we are talking, unbeknown to them, I look them up in the Unlawful Detainer book published by our local rental association and I peruse the Washington Courts website.

Up front (in our advertising and in our first contact by phone) we let people know we value open and honest communication and that we will do a thorough background check of rental history, income history, credit history and legal history. Not too amazing, we rarely have an applicant who lies to us on their application. The liars usually self disqualify and don't get to the application phase.

Applications, written rental criteria, and a property info sheet are available at the time of showing for prospective tenants to take with them. While I am showing the property, I am evaluating them further by observing what they do, what they say, and what I see (their demeanor, their appearance, their car.) I pay attention to the red flags and to my intuition. When I take the application and application fee, I ask the prospective tenant to contact their references to let them know to expect a call from me, so I can process their application more quickly. The applicants who give false information may reveal themselves when they see I am serious about reference checking.

I process one application at a time. The first thing I do is review the application in front of the applicant to make sure all questions are answered, that the application is complete, to clarify ambiguities, and to check photo ID. Then I start with the internet, checking the validity of addresses and phone numbers for employers and previous residences. I also google the applicants name and check out social media sites (My Space, Face Book, LinkedIn, etc.). Then I call references and do the other necessary background checks. Some are done through a service we hire.

Regarding your findings, do not write any notes or change anything on the application itself. Use a separate sheet for notes, as the application, if falsified by the applicant, becomes evidence. If I reject the application, then I mail an "Adverse Action Notice" as required by Washington State law that explains the reason for denial.

Eighteen years as a rental property owner and manager (3 houses and 6 duplexes) has taught me how to quickly ascertain if a person is a likely candidate. I prefer to disqualify them (respectfully and gently) as soon as I know they will not meet our minimum criteria, then I give them other resources for them to pursue and wish them well. I save my time and energy for the good prospects.