All Forum Posts by: Penny Clark

Hi Sam,

If your tenants are adding roommates without your permission, then start by reviewing your current tenant install process. As many have suggested before me, begin by conducting a thorough screening. Provide detailed rental criteria with the ad to minimize confusion and maintain consistency in tenant selection (minimum credit score , income verification and last 5 -7 years of rental history). Make them aware of your intentions to contact both current and previous landlords and obtain written permission from them to do so.  Before they sign,  give them the opportunity to review your lease and answer any questions they may have regarding subletting or a lease break and what that means. You would be surprised how often tenants don't read their own lease. Many don't know what it means to sublet. Also discuss length of stays you allow for family or friends at the property within a single year. Often renters will allow their adult children, parents, partners or friends  stay for weeks without consulting their landlord. Assuming your lease has these clauses, it would be helpful to highlight these areas and have the tenants  initial each page to indicate their acceptance of all lease terms. If your lease does not have these clauses you  should add them in and if necessary consult with an attorney  to assist you with it. Whether you self manage or have a property manager, inspections conducted  twice a year should be routine but may not always indicate an extra person is living there. One thing I have done before a tenant moves in is get a copy of the drivers licenses'  or ID of every person 18 years or older listed on the lease. Doing so may help a process server to identify your tenants on the offchance you ever have to take them to court. I also list any vehicles with their  plate numbers  that they intend to park on the property. An unfamiliar extra vehicle can indicate another occupant is living in the property but is not on the lease.

I hope this was helpful to you and best of luck!

...as a greedy and unprofessional landlord. You can always do a modest rent increase the following year.

No, raising the rent after the fact is unethical and may be illegal in your state opening you up to a fair housing violation. Even if this is not the case, it sets the wrong tone for your business relationship and will earn you the reputation g g 

@Alan Bosca,

Always collect all funds up front at the lease signing. It's also a good idea to request a copy of their photo ID in case you need to serve them an eviction notice. If your property is in California review all the landlord tenant laws particularly those that went into effect January this year.

Check your local laws on your ability to collect late fees if you choose to take them to court to end the tenancy. You can also try thinking outside the box to solve the late rent problem: suggest they pay the rent in two split payments, on the 1st and the 15th. Doing so will show the court you made efforts to accommodate to the tenant if you later decide to evict.

@Anthony Mikolich, Landlords typically use 3 times gross income, however, I recommend also checking their debt to income ratio in your credit check so you can be assured your rent amount CAN be easily paid. For example, even if an applicant's credit score is in the 700s, you'll want to steer clear of those who have a 45-50 percent debt to income ratio. Good luck!

@Arkady Itkin, I would agree with Gordon's response. Before purchasing, you'll need to know if the HOA has restrictions or a percentage limit on non owner occupied units - this includes leasing it as a short term rental. Some HOAs are rewriting their bylaws to prevent owners from exercising this option which can be much more lucrative than a long term lease. You'll also want to know the available operating reserves for capital improvements or maintenance of the HOA and community rules and regulations before closing the deal. Going with a SFH gives you more options without these limitations . Best of luck!

I agree that you should have a written rental criteria to ensure all applicants are screened equally. If both credit and income is similar, I would also recommend you compare debt to income ratio for each applicant. There are applicants with good credit scores but are heavily in debt, which may make it difficult to make your rent payment. Always check previous landlord history if applicants resided in current property less than 2.5 years. 

If you're property is in California I would not reccomend doing a lease longer than a year because you may want to do a rent increase after a year. You'll also want to review California's new rent increase restriction and termination of leases laws which go into effect the first of the year.

@pedrojean, I would review the laws in your state to ensure you are not discriminating against this applicant's type of income.  For example, in California it is illegal to not accept these forms of income:  welfare, child support ,alimony, student financial aid, or unemployment payments.

Do your due diligence by asking for copies of the court order showing the child support award and last 3 months of bank statements to show the deposits as well as applicant's most recent pay stubs. Also, review both current and previous landlord history. If there was a mortgaged home, ask to see last mortgage payment to check if account was kept current or the closing HUD statement if property was sold. Lastly, review debt to income ratio from credit report to ensure applicant has ability to pay the rent with total income available. In my experience, sometimes applicants are unrealistic about what they can afford to pay for housing.

Sure, between 5 to 7 percent is a reasonable amount for preventative maintenance upkeep and repairs for your average single family unit- unless you can do your own repairs and only pay for the supplies. If you choose to self manage your property, you will save substantially since management fees can be up to 10 percent of the monthly  gross rent.   Paying yourself something to self manage,  makes it worth the hassle.