All Forum Posts by: Rebecca Graziano

Hi BP community!

We have a rental property that suddenly went south. The tenants abandoned the property in September due to domestic issues and parted ways. Because they are still on the hook for rent until a new tenant is found, they illegally subletted the house to a random couple. My PM left a 3 day notice to vacate, which they did not follow. He then called local PD, but did not stay to meet them at the property. Because of his negligence, the new "tenants" claimed they rent the house and the cops went away. (We actually fired our PM last month and are transitioning to a different company next week).

We are open to all options... a few we came up with: 

1) The subs don't know the new PM; opportunity to start fresh, ask for formal application process, formally terminate the prior lease and start a lease with them, at a higher rate to offset our risk.

2) Cash for keys - I've read it can be more effective that going through eviction?

3) Reach out to co-signers (parents of tenants) on lease who are now financially responsible and put pressure on them otherwise they will have to begin rent payments and be held responsible for property damage, eviction court fees, etc.

4) Reach out to tenants and explain subletting is prohibited by law in Texas. We will cancel the lease and they don't have to pay additional rent (they already paid for Oct) as long as they get the subs out of the house. They are young and were likely trying to solve the problem the only way they knew how.

5) New PM call the cops, report act of vandalism (house has damage to front door and door leading to garage).

6) Eviction as last resort.

I would like to avoid eviction and find a better recourse. Any thoughts? 

My previous PM is grossly incompetent - I don't want him near this anymore; he created this problem in the first place. So I'm researching what options we have until new management takes over next week. Terrible timing, but that's life.

Thank you all.

@Narinder Gill I really like Equity Trust. They have a lot of educational material for what you can do with your retirement funds within the scope of the tax laws. I’d start there and see where that takes you. Good luck!

@Craig McLaughlin I was in the same spot as you a while back. I had an old 401k I from a previous employer, no clue what to do with those funds. I didn't want to withdraw and lose a huge chunk of cash. And being a high-income W2 earner, rolling into a Roth was not an option. So I opened a traditional IRA instead. And now that money invests in real estate notes, tax-deferred until I'm old and gray (and it is far less complicated than owning real estate directly). I HIGHLY encourage you to look into self-directed IRAs and all the options you can invest in.

I would invest in mortgage notes or private lending. You get great yields and better control over your money, and should you have to foreclose, you are safe as long as you gave yourself enough equity, etc. By far my favorite strategy - and no tenants or property managers.

I have one borrower right now, chronically paying late, so the rate jumps from 10% to 16.99%. We keep making so much in interest because they cannot pay on time! It's pretty funny. And beats all my rentals!

@Theresa Harris the company assigned a final move out date of 9/5, but now they are changing their story to charge 3 extra days, which is an extra $252. My husband wants to fight it, especially given the poor condition of these brand new apartments - his had mold twice! (For two weeks they didn't do anything about the second request... there was still mold on the baseboard when we moved out). Just overall very negative experience. If everything else hadn't been so difficult, we'd probably let this slide. 

Hi folks!

I wanted to know if a property manager gives a moveout date to a tenant, and they turn in keys on that date and paid their final payment, can management change the date and charge more rent?

My husband had rented an apartment prior to buying a house for our relocation. His move out date per management was 9/5. His final move out statement showed a move out date of 9/5. However they charged him rent through 9/8 without discussing it.

Their argument is he is responsible for the 60 day notice period (which would have been 9/8) even though they assigned a move out date of 9/5. 

It seems very dishonest. He’s definitely fighting the management company on the extra charges.Just wanted to get perspective from any PM or apartment investors. Thanks!

@Emily Powell I agree. You have to trust your instincts.

We had a PM that did the same thing- kept the pet rent. Didn’t make any sense. Extra money in his pocket, zero incentive to choose a pet free tenant, (if the option was there).Coincidence that all of our properties with him had multiple animals?

We fired him and switched to larger PM company with standard 10% of rent, they didn’t keep pet rent. It wasn’t a hassle- it was a must! Bad PM kills your investment.

As to the “pet guarantee” programs, I’d stay away.1) It’s another income stream for the PM 2) People cause far more damage than animals 3) use sturdy, strong finishes- ie no carpet on floor or marble in kitchen 4) security deposit 5) there’s always your insurance policy coverage

Ultimately, there’s always risk, and it’s part of the game. But don’t let another player take your chips.

Thanks Lee! It’s active income, so you hit the nail on the head. We both contribute to 401ks, but apparently not enough, and didn’t know about the “150” cutoff number for losses to take advantage of our RE holdings. There’s definitely time to catch up for 2019! Thank you!

Thank you all. I’m definitely looking into a soloK option and other tax deferred retirement vehicles.

Have a lovely day!