BiggerPockets

Tenants - Part III

Sunday, July 05

Part III of my 3 part series on tenants.

Always inspect your properties regularly whether you own it, lease it, lease-option it, have a property manager managing it, etc.  Try to see your property as often as possible.  Just be sure your lease makes it clear that you will be coming in regularly with 24 hours notice during regular business hours or whatever is convenient for the tenant to inspect for repairs and maintenance.  While at the property check the air conditioner, change the air filter, check the smoke alarms, change batteries, etc.  Just be sure to always contact the tenant before entering.  It’s their home and you can’t just show up and expect to get in.

Until the tenant gives up 100% control of the home, it is still their home by law.  You can’t enter it unless you’ve given them written notice.  Some tenants won’t pay the rent and will just move out before you need to evict them.  If they’ve left things behind you may think that they’ve moved, remove those items, and get the property ready for the next tenant, only to find out that they say they didn’t actually move or give you permission to enter their home and discard their personal property.  This could leave you open for a big lawsuit.  If you find yourself in this situation be sure to contact your local attorney to see how to best handle things if it appears the tenant has moved out before you needed to evict them and things were left behind.  You don’t want to move other tenants in only to find out the original tenant shows up saying that they didn’t relinquish control.

Sometimes there is nothing you can do except wait out the eviction process but I believe that tenants need to be held responsible for their actions.  When they are finally out, if they’ve destroyed the property or haven’t paid the rent, when I get a judgment against them I will go after them.  I make sure that the money they owe me and the eviction shows up on their credit.  It may even cost me more money to do this but I think it is important that there is a record of how they have behaved so that others can steer clear of them.  Otherwise we could all be renting to tenants with very bad pasts and no record of it to help us keep them out of our properties.  I’ll also contact a good collection company or collection attorney to go after them.  They take a percentage of what they collect; nothing up front.  It may take some time but you very well may get paid what you are owed.  Your local apartment association or real estate investors association can usually refer you to some good collection attorneys.

As stated in the beginning, you can make great money in reale estate simply by buying and holding.  Think about what real estate cost 20 years ago and what it may cost in 20 years.  Purchase a number of homes, let your tenants pay your mortgage, and you’ll not only get the monthly cash flow, and annual tax benefits, but you’ll also get all that equity down the road when you either refinance or sell.  It’s a great way to make money, and the process will be much more enjoyable if you take the time to do your due diligence on every adult before allowing them in to your property. 

As a wise man once said, “don’t wait to buy real estate, buy real estate and wait!”

William Barnard is Managing Partner of Nationwide Property Investments, LLC and President of Barnard Enterprises, Inc. Will participates in millions of dollars in real estate transactions each year and has experience in nearly every aspect of real estate investing, including rehab flips. Join his FREE Membership at www.nationwidepropertyinvestments,com and start or continue on your journey to creating wealth through real estate!

Comments

1. 

   Will Barnard Reply
   over 2 years ago

   Hope you all enjoyed our three part series on tenants as much as we did posting it. To a profitable future!
   Will B

2. 

   Charles Perkins Reply
   over 1 year ago

   Thanks Will,

   I think this series is worth bringing up again. This issue of abandonment is not real clear and it pays to get solid advice as a landlord if this seems to be the case. Laws vary from state to state as well.

3. 

   Dale Osborn Reply
   over 1 year ago

   You might want to include a clause in your lease authorizing a monthly inspection of the property with the required 24 hour notice. Good information for Landlords to follow!

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