All Forum Posts by: Timmi Ryerson

Wow there was really a lot of damage for only having been there for a year +.  I would not be so lenient and would charge them for the damage.  I would also charge them for the cleaning and sod replacement.  That is not normal wear and tear it is excessive.  The stains in the carpet are also due to carelessness and lack of attention to the proper care and maintenance of a property.  I would get an estimate to restore the garage floor and charge them for the whole amount.  I disagree that you should not put higher end stuff into a rental.  I do it and charge for it with higher rent.  My tenants do not live so carelessly that they cause damage.  I also do inspections every 6 months just so I can see if tenants are keeping their homes in good condition.  If they do not, they get a notice to comply and more regular inspections until there are several in a row that they pass.   That being said, I also have a Policies and Move out Instruction document that I have tenants read and sign at the time they sign their lease.  It tells them that I will charge for damage like stained carpets, torn draperies, broken blinds, excessively dirty walls and uncleaned units upon turnover.  So there are not surprises.  If I had epoxy on the garage floor, I would include that in the list of items that could be damaged and therefore could be charged against their security deposit.

I have a clause in my leases that says that I charge $X for my time to arrange for repairs and that I am reimbursed when I do a repair myself for my time if it is tenant caused damage.  If it is wear and tear I do not charge.  I keep receipts and copy them into my billing to the tenant.  I have not had anyone refuse to pay or complain.

When you use third party collectors who do not give you PCI compliance, you are subject to charge backs for which you have not control over.  If you have read the charge thread on BPs you will see  that there is a trend for cagey tenants to do 3 months of charge backs just before they move out.  They can do this and the landlord has no recourse because they are not PCI compliant.  If you are going to use 3rd party payment processors it is best to do so through a certified PCI compliant software system.  That will give you the ability to at least be able to fight the charge back.  But if you are using a 3rd party system and have no chargebacks then you have been lucky.  

When I choose a tenant I want one that will be able to pay rent.  Most tenants expect to pay an application fee these days.  Everyone charges the application fee.  If they know that they will not qualify they will usually not want to pay the fee. Just ask them why, when the say they don't want to pay the fee.  There may be criminal history or even eviction history on the report and they know it.  For those who want to give the fee back, I suggest that you raise your rent $2-3 per month and then credit the fee back at the termination of the lease.  They have actually paid for it by then if it is a 12 month lease.  I would also qualify that refund in that they will be required to have paid rent on time every month, and have no damage at the time that they vacate.  It is sort of like getting the security deposit back; it gives the tenant an incentive.  If a tenant wishes to show me a credit report that they have in their possession, I will always look at it.  If it is obvious that they will not qualify, I tell them and go to the next applicant.  If there are no red flags I stick with my rule and tell them that in order for me to consider their application, I will need the application fee and for them to cooperate and complete a new tenant screening.  Just my 2 cents worth.

Most insurance policies for fire and what ever you have covered offer you liability coverage and when bundled you get better rated.  How much is this coverage for $300/$500 or $1,000,000/$2,000,000.  Just get a policy estimate from your insurance broker which will include the liability rider.  You can compare the costs then.  But with virtually no information on what the coverage is, I would refuse it.  And your PM sounds like the arrogant type who knows more than you so I would be careful there.

I have been a landlord for 35 years.  I collected rent by hand when I first bought my rentals.  I had commercial and residential rentals to manage. I also lived in another state, so had to travel once a month to collect rents.  The problem is that many tenant, who knew I was coming would not have their rent payment ready and would not be available. So I usually had to stay a few days just to collect rents.  I did charge late fees but it was anything but successful. Of course I had to do the accounting as well.  Years later I learned that one could have software built that would allow the tenant to pay rent online AND do the accounting.  I looked into it but did not find anything I thought would fit my situation and it was pretty expensive.  So I decided to build my own.  I built an accounting system that was automated because I hated doing the accounting and never really figured out how to use quickbooks.  So my tenant logs in and pays the rent securely and their payment is automatically linked to the settlement account to which I want their payment to land.  Simple and tenants love it.  It is very affordable and I have solved my problem.  Right now I am building a new stack of technology to make it even better for our use. When it is ready I will post an announcement here on Bigger Pockets.  For 2 units a full support system plus rent collection would cost you $21.83 per month and all accounting is done for you.

Humm.  You got a quote from your PM for an amount certain.  Did the PM issue a work order with that quote in the order?  Do you have copies of your quote with your written approval on that quote?  If so you are responsible for entering into a contract engaged by your PM for the amount you agreed to pay.  I am not a lawyer but have been a property manager for many years.  If there is a solid quote that is agreed to and the company comes back and charges more, you are contracted to pay as agreed.  They will eat the overage.  So look carefully at the agreement you signed before losing sleep over it.  If you did not sign a bid or authorize a certain amount in writing, you may be liable for the whole bill.

@josephhdifranco:  Appreciate your comments.  Iot is a 2 acre property in a neighborhood of 35 1 acre single family homes with comps as close as across the street and everywhere within a 2 mile range.  So no, nothing special except that it is a log home with rental over the garage and a horse facility and pastures.  But there are many log homes in the area.  Some have rental units and several also have horse facilities. The comps were available to the appraiser who chose to go to a different city where log homes are rare.  This was truly a disparate report which will be reported to the state board governing appraisers.  

Had the same sequence of problems and it was highlighted by the appraiser. Since Dodd Frank and Sarbains Oxley, banks have to order appraisals and no one can choose the appraiser. As a result, there are many very bad appraisers that get work regularly regardless whether they are accurate or "good" at what they do. We need to lobby for that to be changed for sure as a group I think. Our experience was that the first loan fell through because the interest rate went up to 8.2%. I bailed. But the appraisal was at market and well done. No longer can we reuse appraisals done within 6 months as we could before. So the appraiser win big time. (that also has to be changed at the congressional level). So we finally got a good rate with 70% LTV and had to have another appraisal. This guy presented wrong information about the property in terms of square footage, number of rooms, left off the second rental unit and came in $350K less value than the previous appraiser had given with apples to apples comps. This new appraiser used apples to oranges comps in a different city about 70 miles away. I had the lender point out the differences and ask for a reconsideration. The appraiser refused. I had no other option but to get another appraisal. This one came back at the same value as the first one with correct data. So I did a chargeback on the second appraisal and presented the wrong information with comparisons of the first two appraisals. The credit card company sent a query and the appraisal company lied to them saying that we had signed an agreement no to charge back the fee under any circumstance. We had not signed any such thing. We had only allowed our lender to have our credit card charged. Our lender send info stating that he felt the appraisal was poorly done, a month late in delivery and did not correctly reflect the value of the property. Still the credit card company would not consider the charge back.

Summation:  There is no protection for property owners from the appraisal industry where there are clearly people who want to control the price of properties and hold the keys when people are trying to buy or refi properties.  It happens for residential and commercial properties.  These people are giving opinions of value. There is no science to it.  It would be very helpful to have input into how the laws governing this industry so that those who are not good at what they do or try to control a situation, are able to be weeded out.  I am sorry you are having so much trouble.  It is a jungle out there for sure.

I would call the police and file a police report.  Then I would hire a lawyer and sue him for malicious damage.  Do contact your insurance company but usually they will not really go after the perp.  I had a tenant who did $15 K of damage breaking windows and all of the doors, ripped closet doors off the track and broke all of the furniture including glass table tops because they were having a fight.  Police were called.  Both arrested and got jail time for the destruction.  Insurance did not cover even half of the damage...and they never filed against them because they said they never got a response to their inquiry.  Duh...so get the police report and get a lawyer on it.  You will be able to recover damages, lost income and legal fees if you can prove that this company did the damage.  Only problem is that they have to have enough to go after so you can recover what is due.  IE trucks, equipment, cash, etc.  So sorry this happened to you.  Never heard of anything so heinous in 35 years in the industry.