Questions from a soon to be new landlord

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Questions from a soon to be new landlord

Tarcizio GoncalvesPro Member
Rental Property Investor · Palm Beach County, FL · Member since 2016 · 150 posts · 40 votes

Hi everyone,

I am getting ready to close on my first owner occupied 2 family. This will be my first time dealing with tenants. I was wondering if people can help me out.

Because the tenants on the second floor have a lease until 9/30/17, I will inherit them. I will be moving in at the beginning of August. According to the current owners, they are good tenants and always pay their rent on time. Because the seller doesn’t live in the property, they allowed a few things that I am not a fan of. So far, they are allowing the tenants to:

  • Park a crashed vehicle on the driveway for an undetermined amount of time
  • Allowed the tenants to add their own washer and dryer in the basement for their use (1 washer and dryer per apartment). My goal is to add coin operated machines so that I can get some help with the water bill.
  • The current owners split the basement in half and allowed each apartment to use their section in the basement as storage. There are a lot of stuff in storage from both units down there. One half will be emptied since one unit will be vacant at the time of closing
  • I’m sure I will find more while I am living there but this is what I observed so far.

I’ve heard more than once on the podcasts if a person wants to be a successful landlord, he/she needs to be an a-hole. Is there truth to this statement? That is not me and I cannot see myself being this type of person.

If these tenants turn out to be great tenants, I would love to renew their lease in September, by giving them another 1 year lease. They are a young family with an infant and a toddler. If I keep them for another year, I can save with the turnover costs. I would love to hear from you all on what that first conversation should be. I probably can’t ask them to change what I mentioned above until they renew the lease with me correct? What things should I say? I will definitely tell them that this is a family home so drugs, loud parties, drunk people, bla bla bla will not be tolerated. Anything else I should mention?

One more additional question, I’ve heard on one of the podcasts someone mentioning a book that gives landlords a bunch of systems to put in place to have fewer calls, fewer times doing maintenance, etc. Would anyone happen to know what book this is?

Thank you all for all the help in the past few months. 

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Phillip Faries
Flipper · Chicago, IL · Member since 2015 · 44 posts · 33 votes
9y

Congrats on the new venture!!!

Inheriting tenants isn’t necessarily bad. Have you listened to the latest Bigger Pockets Podcast? @Meghan McCallum touched base on this. This is a business relationship and their these actions could/are affecting your business. As the new owner you should go in and set expectations for them to continue living there going forward.

Regarding your bullets, I too am facing the same thing now (inherited tenants) as I am going to be closing on a 2 flat (going to convert to a 4 flat)

After I close I am going to make it clear that I will be moving into the building once its renovated and I will be looking to make/take the building and over all living condition to a much higher standard. In order for me to do this I need your cooperation and thus the following changes will be made. In my case:

  • Brand new coin operated laundry facilities (now its free but the w/d’s are on the verge of death)
  • Fully renovated back yard – meaning your dog can’t use it as a bathroom any more without you picking it up…….
  • Your items in the basement will need to be relocated as I am turning the basement into a gym/laundry and another apartment
  • Both their units will be renovated with new kitchens and baths. (once the basement is done, I will have them temporality moved there, should they wish to stay)

Once I paint the picture of how I am trying to make the building better they should get on board, and if they don’t, come 9/30, non-renewal there lease.

I don’t think you need to be an A-hole, I start my relationships with my tenants very cool and calm and simply layout the rules in my lease addendum. However, there have been a few times where I’ve had to get aggressive and the tenants reaction is like “crap, he’s never like this….. maybe I’m in the wrong.” (mainly pets or painting the walls). Be fair but hold your ground per your lease, it’s your greatest tool in telling them no, but also your enemy if you do it wrong.

Saving turnover cost is great, but I bet your nervous about having to find/pick a new tenant should you non-renew. (better to deal with the devil you know kinda thing) However, if they leave this maybe a good thing, fix up the inside to get more rent or if rent is below market, now is your opportunity to get the rent to market levels. BP has a greatt tool for finding new tenants, a yes/no system which I use and haven’t had any issues finding a tenant that works for me.

Sorry I don’t recall the book but I’m sure someone on here will!

Again good luck and welcome to the team!!!

Any questions just PM me.

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  • Phillip Faries
    Flipper · Chicago, IL · Member since 2015 · 44 posts · 33 votes
    9y

    Congrats on the new venture!!!

    Inheriting tenants isn’t necessarily bad. Have you listened to the latest Bigger Pockets Podcast? @Meghan McCallum touched base on this. This is a business relationship and their these actions could/are affecting your business. As the new owner you should go in and set expectations for them to continue living there going forward.

    Regarding your bullets, I too am facing the same thing now (inherited tenants) as I am going to be closing on a 2 flat (going to convert to a 4 flat)

    After I close I am going to make it clear that I will be moving into the building once its renovated and I will be looking to make/take the building and over all living condition to a much higher standard. In order for me to do this I need your cooperation and thus the following changes will be made. In my case:

    • Brand new coin operated laundry facilities (now its free but the w/d’s are on the verge of death)
    • Fully renovated back yard – meaning your dog can’t use it as a bathroom any more without you picking it up…….
    • Your items in the basement will need to be relocated as I am turning the basement into a gym/laundry and another apartment
    • Both their units will be renovated with new kitchens and baths. (once the basement is done, I will have them temporality moved there, should they wish to stay)

    Once I paint the picture of how I am trying to make the building better they should get on board, and if they don’t, come 9/30, non-renewal there lease.

    I don’t think you need to be an A-hole, I start my relationships with my tenants very cool and calm and simply layout the rules in my lease addendum. However, there have been a few times where I’ve had to get aggressive and the tenants reaction is like “crap, he’s never like this….. maybe I’m in the wrong.” (mainly pets or painting the walls). Be fair but hold your ground per your lease, it’s your greatest tool in telling them no, but also your enemy if you do it wrong.

    Saving turnover cost is great, but I bet your nervous about having to find/pick a new tenant should you non-renew. (better to deal with the devil you know kinda thing) However, if they leave this maybe a good thing, fix up the inside to get more rent or if rent is below market, now is your opportunity to get the rent to market levels. BP has a greatt tool for finding new tenants, a yes/no system which I use and haven’t had any issues finding a tenant that works for me.

    Sorry I don’t recall the book but I’m sure someone on here will!

    Again good luck and welcome to the team!!!

    Any questions just PM me.

    1Reply
  • Luka Milicevic
    Real Estate Agent · Nashville, TN · Member since 2015 · 2k+ posts · 2k+ votes
    9y

    I will say this, as I have learned from landlording.

    Go ahead and set your expectations for your tenants EARLY. Do NOT wait, as if you let things slide they start to think that is acceptable.

    Seriously, whatever it is you plan on doing-do it EARLY

    1Reply
  • Tarcizio GoncalvesPro Member
    OP
    Rental Property Investor · Palm Beach County, FL · Member since 2016 · 150 posts · 40 votes
    9y

    Thank you @Phillip Faries and @Luka Milicevic for the comments. I really appreciate it. Phillip, what is this tool that you speak of to find new tenants? Can you please tell me where to find it? 

    1Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    9y

    You do not have to be an A Hole to be a good landlord. However if you are doing your job right every bad tenant will defiantly view you as an A Hole.  

    1Reply
  • Craig C.
    Milford, PA · Member since 2017 · 30 posts · 10 votes
    9y
    I do not believe you can say this is a "family" home. That would be discriminatory towards non families. Consult your state, local laws or your attorney
    1Reply
  • Bob B.
    Investor · Jasper GA · Member since 2015 · 1k+ posts · 1k+ votes
    9y

    How much do you think you'll make off the coin operated laundry?  I can't imagine that the few dollars you would make would be worth the ill-will and cost of the units.

    Have them get rid of the car.  If they need to store a few things and it doesn't get in your way then find a way to make it happen.   

    As far as how to limit the phone calls for maintenance, be proactive and fix stuff.  I don't mind tenants calling me when there is something wrong.  It's when they move out and never bothered to tell me that the kitchen drain was leaking is a problem.  You don't need to be a A-hole.  They are your customers, and neighbor.  Set reasonable expectations and chances are you won't need to be have a negative relationship.  

    Turn over is expensive. 

    1Reply
  • Greg H.Pro Member
    Moderator
    Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes
    9y
    Originally posted by @Account Closed:

    @Tarcizio Goncalves Just treat the tenants with respect and don't nickel and dime the tenants and don't ask the tenants to shovel snow, rake leaves, water the lawn, trim the plants because all of this is the landlords responsible. Good luck.

     These are all negotiable per the terms of the lease agreement.  Please let me know what state requires the owner to rake the leaves ?

    1Reply
  • Christine Kankowski
    Real Estate Broker · Temecula, CA · Member since 2014 · 992 posts · 782 votes
    9y

    Read the lease that carries over.

    Im sure the non-functional car is not allowed on the lease, so you can ask they they remove that. I would leave the washer and dryer of the tenants until these tenants move out. Coin op wont make you that much money for 1 unit.  If it was for a 16-plex, that would be another story. 

    Treat it as a business, but a business that appreciates its customers. 

    1Reply
  • Phillip Faries
    Flipper · Chicago, IL · Member since 2015 · 44 posts · 33 votes
    9y

    Hey @Tarcizio Goncalves i couldn't find the link for it but i just sent the document to you via PM.

    1Reply
  • Andrew Acuna
    Investor · Mission, TX · Member since 2017 · 220 posts · 135 votes
    9y
    Tarcizio Goncalves I think Thomas S. said it best you don't have to BE one but the people who want to take advantage of you will think you ARE one. Me personally I would tackle one thing at a time. I would do an introduction letter that covered the basics and gave the expectation that a new lease would be coming soon. The former will carry over but in my case it was weak and I wanted all my tenants on my terms. I would address the vehicle immediately but the laundry I might wait on. Maybe just split the water bill? As to the storage, if it is their area to store as they will I wouldn't touch it even if it's not as organized as you would want, unless of course it's infringing on your area. Other than that, stay calm, be firm, set up expectations and follow through. I'm on my phone so I can't link to it but Brandon Turner wrote the ultimate guide to screening tenants- its gold. You can find it by searching it on BP.
    1Reply
  • Tarcizio GoncalvesPro Member
    OP
    Rental Property Investor · Palm Beach County, FL · Member since 2016 · 150 posts · 40 votes
    9y

    Thank you all for this valuable comments. I really appreciate all the help

    0Reply
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