In the winter of 2003, I was out driving by properties that I was managing in Minnesota, checking to make sure the tenants were maintaining the exteriors. One of the properties was a four-plex building and the day I drove by was the trash pick up day. Ordinarily, there is nothing noteworthy about trash bags and trash bins at the end of the driveway on pick up days. That day, I noticed there were dozens and dozens of boxes scattered about the end of the driveway.

I decided to get out and gather the boxes and pile them together so the trash collectors would take them. I was a little surprised to find that just about all of them were empty and all of them were the same size. I flipped one around to read the text on one of the boxes and that is when I began to panic. I thought I was facing what no landlord ever wants to encounter . . . A tenant manufacturing drugs in the house.

All of the boxes were marked to have contained 24 pint size bottles of Isopropyl Alcohol. Someone had told me before that Isopropyl is one of the chemicals used to produce Methamphetamine. In other words, I thought I had stumbled upon a “Meth Lab” and was worried that it could explode at any time. Not only would an explosion destroy the unit but it would likely take out the other three units and, God forbid… Residents!

I didn’t know what to do. I didn’t think a “suspicion” would legally justify entering the unit without giving the tenant 24-hours notice. In my mind, I started to think about all of the tenants who lived there and quickly determined which one of them had to be guilty. Lois Coleman (I am not using their real name) had been a problem tenant since I began managing the building. She usually paid her rent late, didn’t have a job that I knew of and when a resident made a complaint… They were always complaints about Lois.

I went back to the office and let the owner know what I had found and we both proceeded to pace back and forth for close to an hour while we tried to determine what we could and what we should do. Neither one of us wanted to even think of what the liability could be if there was an explosion.

Still not knowing the right thing to do, I called the police department where the property was located, which was somewhat of a small town outside of Minneapolis. I asked to speak with someone in the Narcotics Division. When they put me on hold, I joked with the owner that the person that answered the phone was probably running over to another desk to pick up the phone and use a different voice.

When I came off hold, I rambled to the officer about what I had found in the driveway and went on about not knowing how to proceed until they literally cut me off and asked for the property address and which unit. After I gave him that information, he asked me the name of the tenant. I replied, “Lois Coleman.”

The officer quickly said, “Ah… Lois.”

I nearly had an all-out panic attack with the realization that the officer knew Lois on a first name basis. The officer got my name and number and quickly told me he would call me within a few hours and hung up before I could ask any questions. The owner and I paced a trench in the floor while we waited to hear back from the police.

Less than 90 minutes later, the officer called back and calmly said, “You’re ok. There isn’t anything illegal going on in her unit.” Before I could say anything, he added, “If you suspect any illegal activity going on in the future, don’t hesitate to call us.” Before he could hang up I blurted out, “Wait! Hang on, hang on!” I said, “What do you mean, I’m ok? What happened? What did you do?”

The officer said in a rather matter of fact tone, “Oh, well I went out to the property and knocked on Lois’ door. When she opened the door, I told her that I think she is cooking Meth in her unit and asked her if I could come in and look around?”

I said, “And she let you?”
He replied, “Well, yeah.”

I was speechless as he explained further. He said, “Look, one way or the other we are going to find out if she is up to no good. She agreed to let me look around and I didn’t see anything to indicate that she was doing anything illegal. Had she refused to let me in, I would have put a squad car in front of the building and one in back and then I would have instructed you to inform her that you will be inspecting her unit and give her 24 hours notice. She wouldn’t get anything in or out without us knowing about it before you could go in to inspect.”

What that police officer told me that day continues to be the most effective method for finding out if a tenant is doing something illegal in the property and I have found that the police tend to keep an extra eye out for you as well.

That same day I called Lois on the phone and asked her what she was doing with all those boxes. She was very apologetic for causing the fuss and told me that she had been helping her mother move recently and she got the boxes from the hardware store after she asked the manager if she could have any empty boxes.

There never was an explosion but, I sure learned a lot that day.

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Tags: drugs, landlord, meth, meth lab, police, real estate, renter, tenant

Simon Lagree Had it All Wrong

Without doubt, being a landlord requires a certain mindset. Before actually owning rent houses, I was certain I didn’t want to participate based on our first experience as tenants. Right after the wedding, the mister and I moved into a lovely little duplex on the edge of town. We stayed 2 ½ years, paid on time each month, never caused damage or broke a single rule. And yet there was no doubt that our landlord was the adversary-he made sure we knew from day one.

When sewage from the entire complex started backing up into our bathroom, his reply was typical of what we’d come to expect. He told us it was a ‘city problem’ over which he had no control. When the excrement seeped through the wall, soaking the living room carpet on a regular basis, he said we’d best get the rent in on time regardless. After 3 months of dookie, we finally left in the middle of a one-year lease. Our loving landlord threatened to sue for the six months remaining and refused to return our deposit.

The Landlord Stinx!

Of course not all landlords are rotten, but enough are that certain stereotypes have grown up around the profession. Just as the words ‘Used Car Salesman’ and ‘IRS Agent’ bring vivid images to mind, landlords suffer from the reputation of being heavy handed, greedy, and suspicious. There’s a certain everyone’s-out-to-get-me mentality that smells up the name.

Unfortunately, sometimes everyone *is* out the get them. Tenants with no respect for private property, governments that assume landlords are milking the poor, state legislatures that want to ensure deadbeat tenants have a place to stay (whether they actually pay rent or not)… no wonder some landlords wind up jaded.

If this were the only way to do business, I’d go back to running likker. But over the years, we’ve found another way… a balancing act of authority and business-like professionalism backed by a well-written lease.

Don’t Smile Until Thanksgiving

I’d like to propose another model based on my first grade teacher back at good ol’ Freeman Elementary, Mrs. Locke. She was ancient–probably all of 30. Her flaming red hair and Yard Stick of Doom had a class of 28 little wildcats quaking in their loafers. She stood over the class, hands on hips and proclaimed her authority with The Look.

She repeated the rules… and repeated the rules… and repeated the rules. And we followed the rules because we respected her. She was not our friend. She was not our pal. She was The Teacher. She could do awful things like send us to the Principal. She could put our desk in the hall where everyone that walked by bore witness to our shame. And if all else failed, the worst punishment of all–The Paddle (which, come to think of, she never actually used.)

Back in the days before smiley-stickers, good teachers knew how to control the classroom without drama. To establish respect, the teacher needed to be seen as an authority figure with actual power. Rules were made, rules were written on the blackboard, rules were obeyed.

Or Else.

So in the same spirit, I present:

A First Grade Teacher’s Rules of Landlording:

• Remember who you are. You own the house. You make the rules. You are The Landlord.
• You are not your tenant’s friend. Don’t pal around with someone you might have to evict.
• Maintain a presence without being oppressive. You either have authority or you don’t. Bluster, swagger and heavy-handed bluff will cause tenants to lose respect (and makes you look silly.)
• The rules are the rules. Repeat the rules, follow the rules, don’t bend the rules-ever. You’ll be sorry.
• Everything needs to be in writing. You can’t send someone to the office without a note and you can’t evict someone without documentation.
• This is a business-act professionally at all times including the way you dress. (Mrs. Locke had the best bouffant hairdo in the whole school…we were very proud.)
• Reward good tenants. You want them to stay, right? Let them know you appreciate the care they give your house.
• Refine your lease as you go. If you find your kiddies are bringing Hot Wheels to class, institute a no-Hot Wheels rule. If you find your tenants park Hot Wheelz on your grass, put a No Hot Wheelz on the Grass clause in future leases.
• Adapt and overcome. Learn from your mistakes. Cut your losses and move on–just don’t make them again.
• Don’t be defined by what you do day-to-day. I ran into Mrs. Locke when I was in nursing school-no missing that red hair. Turns out she had a life outside of first grade. Who knew?
• Remember: People are just people–if they’re honest and trustworthy, they will remain that way once they’re tenants. If they’re liars and cheats they will lie and try to cheat you too-it’s nothing personal.

Which leads to: Nothing is personal. It’s just business.

Random picture of JoJo on the couch that has absolutely nothing to do with landlording.

Tags: landlord, Landlord Tenant, lease, rent houses, renter, tenants

An article in the Sunday issue of the New York Times (“A House Divided:  Uncivil War on E. 73^rd Street,” December 10, 2006) describes a dispute between a landlord and an unhappy tenant in a tony Upper East Side brownstone of New York City.  A battle like that is always a case of someone’s word against the other, but if you read through the article, it becomes easier to decipher who is in the wrong, so to speak. 

Mr. Pavia, the landlord, rented out some floors of his luxurious brownstone to several tenants.  Along came Mr. Couri the tenant.  Mr. Couri started to have problems with a longtime tenant, a gay designer, who lived above him, complaining of noises, music, and partying.  He sent the designer letters citing “lies… late p.m. homosexual escapades,” and threatened to disgrace him by writing to interior design agencies and magazines.

The designer, who never had problems with other tenants or Mr. Pavia before, moves out.  Mr. Pavia eventually sued Mr. Couri for obnoxious and harassing behavior, and Mr. Couri countersued by saying that his landlord refused to disclose the rent-stabilized status of the building.

The article, however, mentions that Mr. Couri, who dresses impeccably in a 3-piece suit, has a history of suing people (nearly 150 times since 1972).  He also has pleaded guilty in the past of defrauding a bank.  If Mr. Pavia had done a background check on him, the problems might have been prevented.

We’ve also had some issues with tenants.  Years ago, when my husband was looking to rent out his apartment, a friend of his who worked in theater introduced to him a young man who was an actor.  I even met the guy; he was good-looking, personable, a little jittery maybe, but seemed like a nice guy.  But jittery was the part we should have focused on.  He turned out to be a crack addict.  Luckily, his family stepped in and moved him out so we didn’t have to begin eviction proceedings.

Unless you personally know the potential tenant well, a background check on a potential tenant should be performed.  A check on credit history and from a tenant-screening agency can be done easily and should be done even when a tenant comes with a referral, as ours did.  For more information, check out on what landlords should know from the FTC.

Tags: biggerpockets, city, dispute, East, landlords, New, renter, Side, tenants, Upper, York

Looking to send your tenants a signal that you’re partially human? With the holiday season in full effect, now is a perfect time to get into your renter’s good graces.

Here are a few ideas to let your tenants know that you’re not so bad this holiday season:

• Send out Season’s Greetings Cards
  The cost is minimal and the benefit is outstanding. A simple card can go a long way towards tenant loyalty.
• Decorate your Property for the Holidays
  Keeping things festive always puts a smile on your tenant’s faces.
• Throw a Holiday Party
  This works better for larger buildings (I’d guess 4+ units). Mingling with your tenants under a different set of circumstancess will help them to look at you in a different light. The holiday party is a nice perk that can go a long way towards tenant happiness.
• Upgrade Your Apartments
  We’ve talked in the past about using incentives or gifts to attract tenants. The holiday season is the perfect time to do a few upgrades on your units. Even simple things like new hardware, doorknobs, etc. let your tenants know you care.

Remember, a happy tenant is often a long-term tenant. Find some way to thank them and show your appreciation!

Tags: apartment, happy, holiday, landlord, rent, rental, renter, tenant

I realize that this is a very basic tenet, but when times are rough, we don’t always follow it. The reason we screen tenants is to ensure that we, as landlords, will be paid, and that our property will not be damaged or destroyed.

What happens when the market is slow and you can’t find a tenant?

I’ve gone through periods where some of my units have gone months without being occupied. There were some applications, but I turned them down after screening them. Why? These tenants would have resulted in more work from me and my lawyer.

You don’t have to evict a tenant you don’t have!

It is always tempting during slow periods to drop your tenant standards, but that is what can get you in trouble. Avoid the temptation and continue to market your rentals. You’re better off taking a small loss then a huge one later.

The three most important things to look at when screening tenants are:

• Credit Report - Does the applicant have many of their accounts overdue? Do they pay their bills on time? This is a good indication of whether or not they will pay rent on time as well.
• Rental History - Contact previous landlords. Why did the tenant move? Did they damage the property? Did they pay rent on time? Were they “problem” tenants?
• Employment history - Does the applicant have a job? Can they hold a job down?

If you focus on these three points and do your homework, you will not have to worry about evictions or problem tenants. They will never get the chance to rent from you in the first place.

Note: This is not a perfect system, but neither is life!

Tags: Credit, damage, employment, landlord, rental, renter, screening, tenant