All Forum Posts by: Marcus Curtis

No "pet" deposit or fee can be taken as it is NOT a pet... It is an service animal. This does not mean however that you cannot charge for damages. They still have the obligations of their lease not to cause any damages beyond reasonable wear and tear. A dog pooping and staining the carpet is in fact damage regardless of it is a pet or a service animal. This is an accommodation.

Downside: committing to a lower than market rent for a three year term. Additionally, if these "nice" tenants turn into bad tenants your options of simply non-renewing their lease at end of month 12 becomes nonexistent. I have never seen the benefit of offering longer terms. If they like where they live they will stay. If they don't, they will move or become a nuisance.

In my opinion, this really is something that the manager should be watching for. Of course, tenants should report leaks or drips but they are just that-tenants. They realize that for the most part they have no profit motive for jiggling the handle on the toilet or requesting the faucet be rebuilt. Your water bills come in monthly in most cases. These bills should be monitored for usage rates compared to historical data. Even a 15% deviation from the norm for a small residential property could mean a leak which could be unknown or unseen by the tenant. When all else fails a letter reminding tenants to report maintenance issues and emergencies immediately helps with being authoritative yet it creates a synergy between landlord and tenant that is beneficial for both parties.

You should always have them sign an indemnity and hold harmless form. This is the only way to keep weasels like this at bay.
If the value of the items they are claiming are significantly high like their grandmothers turn of the century china collection valued at $20,000 I would tell them to get lost. If they are missing their blender tell them tough luck and have them come after you with their lawyer costing them a Ninja Blender hundredfold. They won't.

Run Credit and Criminal Background

Criteria:

• Credit score of 550 or above. If between 550 and 600 they pay additional security deposit equal to one months rent. Above 600 no additional deposit.
• No felonies in past 10 years and no evictions in past two years.
• Must not owe any prior landlords money.
• Must have three times the monthly rent in verifiable income. No exceptions.
• Must be employed on same job for at least 6 months (additional security deposit applied if not)
• Must have at least 12 month verifiable rental history in past 18 months.

Keep in mind this is what we use and it may or may not be appropriate to all areas or property types.

The key is that if you run one person's credit you should run them all otherwise someone will find out, cry wolf and claim discrimination against you with the courts. Consistency is key.

Shoot for a quad with opportunity for cosmetic enhancements. With your construction experience and connections you should be able to buy low, improve the place, raise rents and raise asset value.

Get FHA financing as an owner occupied with as little as 3.5% down saving your cash for improvements. Put in some sweat equity and refi-out to a traditional mortgage and move on out to your next quad to do the same thing.

You should be living rent free or at least near rent free the entire time.

Kortez,

Essentially, what you are describing is the role of a property manager. Most states have licensing requirements and laws in place to protect owners and tenants alike from inexperienced, unethical and unfair housing practices.

My recommendation to you is to get experience. You need to not only know how to lease a home but also know the lease language, landlord tenant laws, fair housing, appropriation of funds, escrow requirements, and last but not least; How to deal with difficult tenants.

The best way to get experience is to work with a local management company. This will also allow you the opportunity to not only learn the ropes but to also determine if this is a business that you will be happy pursuing before investing time and money into your own business. This business is not for everyone and the turnover for new managers is extremely high due to the stress.

Try searching this site for members who live in the Indy area and see if they might need some help or if they know anyone who does.

You should be including your maintenance items (i.e. Landscaping, painting & decorating, maintenance labor, maintenance contracts) as well at Administrative line items (i.e. management fee, personnel expense, telephone, office supplies etc.) Also, do not forget your fixed costs with taxes and insurance.

Take caution when looking at historical data provided by the seller. This data is easily manipulated and the numbers are often times hysterically inaccurate. You should really be aiming to develop a Zero Based budget based off the information developed in your pro forma. With aggressive management and sustainable financials you should be able to stabilize a property of that size within 2-3 years.

As far as your question regarding the tenant paying their own heat I am unclear what the scenario is. It sounds like you have a centralized boiler system at the property in which case you would not be able to- in a financially feasible manner- convert it to tenants paying their own heat. One option in a scenario such as this is to setup a Ratio Utility Billing System (RUB) where each tenant pays a percentage of the properties heating costs based on their leased square footage. You can find more information on this by searching BP.

Allow me to illustrate.

If you are going to go with secured mailboxes you will need to contact your local postal office and tell them you have two new boxes that you will need to get "Arrow" locks installed on.

For small properties such as a duplex I don't bother with making sure the two delivery points are registered with the post office. Most postal carriers have enough common sense to recognize which box is for unit A and which is for unit B.

As a forwarning... be patient with the USPS. They have no profit motive so they will take their sweet, sweet time in installing any locks you need.