All Forum Posts by: Bill Crow

@Carlo D.

Nathan Gesner has the most concise and correct reply so far. The advantages for a lease longer than 12 months typically all go to the tenant and don’t provide the landlord with any substantial advantage.

(1) Tenants will move when they move. A longer lease will not substantially add to any sense of commitment.

(2) Unless you can predict the changes in property taxes, insurance, construction and repair costs, etc. over the lease term, you are putting yourself at a huge disadvantage.

@Jay Lee

A few thoughts:

* Increased deposit

* First and last up front

* Review the credit to determine debt load to give you an idea whether the shortage of 3x rent is a real deal killer or not.

* Check all prior references carefully and glean any character info you can.

* Make sure your lease is as airtight as possible

* Attempt to get them on auto-pay if possible

You say he’s “going through” a divorce. Is it final, or in process? If the terms aren’t ordered and signed, nobody knows what his obligations may be going forward. I’d also want to know what his plans are for the delinquent credit obligations.

In conclusion, any time you make an exception to your leasing standards, you should have a sufficient mitigation for the exception. Lenders make decisions based in part on the “C’s of credit”. These vary by lender and loan type, but generally include credit, character, capacity, and cash flow. You’re compromising on credit and cash flow, so the other two are where your prospect needs to be standing tall.

@Zach Rubin

I’m not sure why you believe the interest rate on investment property 2 years from now will be as good or better than the rate you have on a primary residence today. Am I reading your post correctly?

Secondly, at your stage in life, it may also depend on whether you are counting the income from this rental in your household operating income. If not, you may be better served NOT to prepay for the reasons others have mentioned - the renter pays your mortgage, so the cost of funds is not yours to bear, and the cash in your hand can be deployed where it does you the most good.

I hated the idea of being in debt and it kept me from starting my investment real estate journey for a long time. Now that I’ve embraced that the debt is part of the overhead of having the business, it is much less of a pain point.

Best of luck with whatever you decide.

@Jeremiah Dunakin

At least ask pre-qualifying questions and state your criteria up front. Otherwise, you will waste a lot of time with unqualified prospects.

I’m not a fan of the Zillow application, but at least it’s “portable” to the tenant - they pay Zillow one fee and their info is available to multiple landlords provided landlords use Zillow to list the rental.

@Will Morrison

I would vet him just like any other new tenant and add him to the lease as an additional tenant. He needs to be fully responsible - the idea of making her responsible for him sets you and them up for some real problems if their relationship sours. On the flip side, if you don’t treat him as a tenant in every sense of the word, you may not have rights to protect your property (such as eviction) if he becomes a problem.

To summarize, he should be “all in” or “all out”, nothing in between.

@D. Andrews

Before blaming the delay on “slow rental season”, take a good look at the property and competing rentals. Is your price right? Favorable location? Right amenities and upgrades in your property? Are you marketing it to the right audience?

If it’s a marketable rental, a small discount or move-in incentive would be less of a loss than letting it sit or dumping it.

@Colton W.

The other answers you’ve received paint the picture. It’s such a small expense that the relationship is more of a deciding factor than the cost. If you can use it as a teachable moment that they should call you first, then do that.

Personally, I have the spare parts to fix one, but my time and gas to replace one are as much as a new seat, so either choice is about equal.

On a side note, what the heck are people doing on the toilet seat to break a bolt? I’ve never broken one through normal use. On second thought, I don’t want to know. :)

@Jairo Zapata

Looks like you’ve received a number of pieces of good advice already. You didn’t say how long you had your tenant, so I’ll add this one… your tenant evaluation job doesn’t end the day the lease is signed. You should continue to be observant of changes in tenant behavior. Stuff happens. Life changes. If you are monitoring your investment and the people who have possession of it, you have a better chance of being able to be proactive and minimize potential loss, rather than simply reacting after the situation is at a point of no return. You don’t have to be intrusive, just be observant.

@Juan F.

It’s possible that you don’t see your question answered on BP because the question is fundamentally unsound. Borrowing from family increases the risk, not decreases it.

Doing the bare minimum is a bad idea. Things change. People change. Stuff happens. What looks rock solid now may blow up in your face later.

Your documentation SHOULD include collateral and default provisions, along with the same contractual requirements you would have with an unrelated party.

Doing the minimum for a long-term transaction makes about as much sense as buying the minimum amount of gas to get your car from point A to point B. If all goes perfectly, you might be fine. If any one of an infinite number of factors go against you, you’re screwed.

Do it right or don’t do it at all.

@Moises Guerra Garcia

Can a real estate agent refuse to send the offer I proposed?

Yeah, once. They won’t get another chance.

(Presuming your offer is legal n every way)