All Forum Posts by: Shaun Patterson

From what everyone said the screening wasn't done properly by both parties. I had to tell a realtor one time that wanted to stuff a tenant in a property just to get the commision. I let them know that we will be doing the screening because after you get your commision you're gone. I know in Florida realtors are suppose to have a fiduciary responsibility to you unless they are a transactional broker. We also set up exclusive leasing agreements that go over what is required of us.  Not all realtors follow that though.  Also some are only focused on sales. 

As said before look at everything. Income to rent %,  debt payment to income %,  include food assumptions, utilities, Gas if he has a car. Make sure its not 3x the rent before taxes.  Also yes screen them both separately since they will both be on the lease. Even if he is the only one making money. You might find out that he has good credit with no debt and she is the one with 2000 per month is debt payments or the other way around. 

We have moved alot of our tenants to online payments and phone payments. We dont give any account numbers to tenants to deposit checks do to fraud issues that are prevalent in florida. If they want to pay cash they can pay using the retail payment outlets. 

1. We show them the online portal and help them set up their checking account online or credit card information. 

2. They can pay anytime they want and cant give excuses about checks being in the mail. 

3. For older people after they set up the online account with us they can call in and make payments over the phone. 

4. Its a faster turn around time to verify bounced or returned funds. (some backs wait 2 weeks till they return a check , direct debits is only 3 days) 

5. It reduced our fraudulent checks and money order issues. 

6.We also take security deposits this way. 

Alot of online softwares now offer this service and it is some time easier for tenants to do then putting a check in the mail or running to the bank. 

I would watch the realtors looking to get the first months rent to put in tenants and get your screening guidelines in order also. make sure to deduct that charge from realtors to find you a tenant since it will affect your cash flow. I just had to decline a tenant a realtor brought on a property. They told me the client was a great fit (they made 3x the rent!!) . After screening the tenant. yes they made enough for the rent to only be 40% of the after tax income (not just 3x gross income) their debt payments ate away at the other 60% of income which would mean that when you add utilities, food, misc spending they would be in over their head. If it is a townhome take at least 1 month's rent from the property to handle turnover unless your looking to have the same tenant in the property for 30 years. I would also keep the Capx reserves for what you will not be replacing. The reserves should be in place for when you are ready to replace them in the future. So I would add a few more columns to the numbers that you are showing now to get a better idea of the actual cost for this property. For depreciation I would contact your CPA dont listen to anyone that doesn't currently know your tax situation to give you advice. In regards to the capx timeframe if its almost at the end of its useful life and depreciation then it might make better sense to replace.  

As said before we usually set up move in time for the first of the month. If someone wants to move in faster we then make sure if it's a valid reason and also make sure it's not because of previous issues with other landlords. Sometimes it can be a red flag so make sure to screen the landlord questions carefully. 

Its always hard when things like this happen. Hopefully you can get the rentals back on track. 

Keep collecting apps, create a waiting list. You should know at least 60 days before when someone is looking to move. At that time call the people on the waiting list and start advertising. Rinse and repeat .  Regarding the amount to charge in rent I think it depends on the market in the area. If you are having a hard time getting qualified tenants at market rents then yes you may have to have some concessions. But if you are in a hot rental market with alot of qualified tenants then keeping it at market rents is the way to go. 

If you have a set guideline for how you screen tenants and you decided to not follow it on certain instances and then follow it in other instances it's asking for trouble. The kid may be a jerk at school but the model child at home. You just don't know since you aren't in his home 24/7 you're just jumping to assumptions about how you think he will act when at home. 

If the property is not sub metered then you have to get the utilities in your name. What some landlords do in that situation is that they bill back the charges to the tenants at a flat rate. The bad part to that is most of the time tenants don't care about utilities usage so they will use more then needed. So if you don't have the amount your charging back to the tenants high enough then you will end up losing money every month. They also have things you can buy to help with charge backs that you can connect to the units. Another thing that was done in the past before the rental market was so hot is that they will offer partial utilities included in the rent to give you an incentive to move in. This isn't done anymore due to the type of market we are in (at least not really here in Florida). As normal if it is sub metered the tenants will pay. 

here in Florida we have some investors that we do that for Thur if you don't have the systems in place to handle the emergencies you might run into some issues when pipes burst.