Future Newbie Landlord /W some Questions. Advice Needed!
Staten Island, NY · Member since 2015 · 265 posts · 59 votes
Hello all, so I have some questions as a future Landlord that I am just trying to figure out.
1) I am interested in a property that is a Short Sale and Utilities are currently turned off. If I do end up buying the property what steps should I immediately take next? Do I turn on the utilities? Will I be paying for utilities until I find tenants to move in? How does this process work exactly, quite confused here.
2) How soon to I start looking for tenants? Should I do it myself or use a realtor?
3) How do I collect rent as a newbie landlord? Should I use a website or go in person and collect?
4) How do I create a lease agreement? What terms do you put in it? Some common things that should be in the lease agreement so to speak.
Any other tips/advice welcomed! Thank you!
You should get insurance
then contractors bids
Do the outside of the house first
They might not need utilities turned on until the contractors start working inside the house
You will be paying for utilities until you find tenants to move in
Is the property close by? If so then you can do it yourself. If it is out of the state then get a realtor.
You can create a separate bank account and have the tenants place the checks in there. If it is more than 15 units then its best to get a property manager.
There are websites that have sample leases for each city. Use those and add what you want as long as it is legal. For example the one that I live in I put in no pets, no smoking, no sublet, no waterbeds, no inflammatory speech displayed in window, can't use the roof, decorations must not destroy walls. I let my lawyer look over the lease as well.
Hello all, so I have some questions as a future Landlord that I am just trying to figure out.
1) I am interested in a property that is a Short Sale and Utilities are currently turned off. If I do end up buying the property what steps should I immediately take next? Do I turn on the utilities? Will I be paying for utilities until I find tenants to move in? How does this process work exactly, quite confused here.
If you're buying a short sale w utilities turned off you want to make sure there are no major plumbing issues, or electrical ptoblems. Get them turned on asap. You will pay until tenant moves in. They will then put them in their name once they move in.
2) How soon to I start looking for tenants? Should I do it myself or use a realtor?
Start looking right away. Use Craigslist or hire an agent. Pay the agent one months rent if you think you need help in the beginning.
3) How do I collect rent as a newbie landlord? Should I use a website or go in person and collect?
Give them your mailing address and have them mail you a check or money order.
Regarding a lease, look online for one specific to your state or check and see if there is a local landlord association that you can join and they may have one you can use.
Hello ,
I myself am a newbie landlord. I turned on all utilities until I found a tenant and signed the lease. The bills will not be much as there is now one living there. You will need the utilities on to show the house, clean, repair, ect..
I didn't use a realtor I just used online site such as postlets and craigslist, You will get plenty of inquiries.
This will be my first month collecting rent other than the initial. I gave my tenant my account number for direct deposit into my account at BOA.
Good Luck!
Paypal is free for you, if they choose the pay friends and families option, which is okay to do for paying rent (I called PayPal to verify this for my daughter's rental). Free for the tenant, too, if they pay with bank account or debit card, I think. If tenant pays with a credit card there is a fee, and you tell the tenant to choose the option where they agree to pay the fee. I wrote up a simple addendum for the PayPal payment option that told them what to do, and where they agreed to pay any fees incurred. Tenants and my daughter loved it. She even let two roommates make their payments separately (not normally advised).
The only thing to consider, that you may find to be a downside, is it can take several days to transfer the money to your bank account.
THE LANDLORD SCHOOL QUIZ (by Nancy Neville)
QUESTION:
WHAT IS WRONG WITH THIS AD?
7778 Archdale is a 3 bedroom bungalow.It features a nice kitchen, full basement and a one car garage. Rent is $750 a month. Adults only!
WHAT IS WRONG WITH THIS AD?
1942 Bisbee Lane is a 2 bedroom duplex.This is a smoke free building. Smokers please do not apply.
WHAT IS WRONG WITH THIS AD?
8259 Wisconsin Street is a beautiful 2 bedroom 4plex.The rent is $525.00 a month. Senior Citizens Only!
a. Should you show the home while repairs are still needed and not completed yet?
b. How can you make your home more inviting?
c. What color of paint should you paint your rentals?
d. What should you bring to the Open House?
a. You see 2 adults get out of the car along with their 3 children.One adult is smoking a cigarette and the two children are eating chips and one child is drinking red pop.What do you do when you see them coming up on the porch?
b. At what moment do you begin screening after the initial phone call?
c. What screening methods should you use at the Open House?
d. What do you say to an applicant that asks:“How come you’re asking so much for rent?”
e. What if they challenge you and want this house but believes you’re a dope for asking so much because it doesn’t have air, or this or that?
5. How should you dress at the open house?
a. Who needs to fill out the Application Form?
b. What is a Criteria?
c. What is a “Tester”?
d. What do you say if an applicant asks you if you take Section 8? Can you say no?
a. What is Section 8?
b. What is FIA?
c. What are the negative reasons for not taking Section 8?
d. What are the positives?
If the tenant calls and says the bathroom tub faucet doesn’t work and you need to come out and fix it, and you know you just installed a new kit just before they moved in a week ago, what do you say?
a. Do you shout, “You IDIOT, don’t you know how to TURN A KNOB!
b. If they can’t shut off the water tell them to turn the water valve off in the bathroom or in the basement and you will get there within the hour or within a reasonable time and then bill them for it later
c. Tell them to call a plumber and fix it themselves?
d. It a tenant calls and says, my toilet is running and won’t shut off what type of an emergency would you rate this.With 5 being top priority and 1 as no hurry?
e. If a tenant calls you and says her electrical outlet in the dining room doesn’t work because her lamp won’t light or her TV won’t run when she plugs it in…what type of an emergency is that from 1 to 5
f: If a tenant calls and says, the roof is leaking and it’s ready to fall down on my head.What type of emergency is this?From 1 to 5
g. What is considered Damages in a court of law and what is considered just wear and tear?
a. What type of Lease Agreements are there?
b. What topics should be contained in a lease agreement?
c. When signing the lease what is required by law for you to give the tenant when you give her the lease? (3 things)
d. Do you give the applicant the keys if they don’t have the full move in money?
e. Do you give the applicant the keys if they don’t have the utilities in their names at the time you sign the lease, but they promise they will?
f. When is the Lease finalized?And can you or the new tenant decide to Not sign the contract at the last minute?
g. If they try to pay you by check, do you accept it?
h. What if a tenant has a pet and you allow pets, but they have a Pit Bull. Would you accept it.If not why and how would you tell them?
a. When do you send your tenants a 7 Day Notice to Quit?
b. When can you file it in a Court of Law?
c. When do you charge a late fee and are they legal?
d. Can you charge a per day fee in the State of Michigan?
e. When are the papers called that you file in the court house after the 7 day Notice to Quit time period has elapsed and it’s time to file?
f. What happens when you take these papers to the court house and file them?
g. If a tenant wants to pay part of the money before their court date, do you take it?
h. If they try to pay all of it by check, do you take it?
i. When you go to court what do you bring with you?
j. What happens if a tenant doesn’t show up?
k. What happens if a tenant does show up?
l. After you have filed the paperwork in court and have a court date scheduled, what do you do next?
a. Call the tenant continuously asking where is my money?
b. Go there in person and say where’s my rent
c.Call them up and warn them that they better have the money or else?
d. Sit back and let the courts do their job?
1. When you go to court how should you dress?
2. What is the very first thing you need to do when you arrive at the court house?
3. If you go before the Judge do you do the following
a. Stand there with your hands on your hips and stare at the tenant?
b. Chew gum and pop it
c.Yell out You’re a Liar when the tenant is talking
d.Stand there quietly, professionally and have all your paperwork ready and wait until the Judge acknowledges you.
4.What should you bring with you to court to make you a winner?
5.What happens if you win?
6.How many days must you wait before you file a Writ of Restitution?
7.What happens when a Writ is issued?
8.What must you have ready the day before the a Bailiff comes out to remove the tenant from the premises?
1. After it is all over and you are allowed to go back into the house and you see some pretty bad damages do you..
a. Throw your hammer across the room and stomp your feet?
b. Do you cry and say I quit?
c. Do you take pictures and document everything so that you have evidence to keep their Security Deposit?
d. Do you burn down the house?
1. Can you keep the tenant’s security deposit?
2. If so, why?
3. And if you can how do you make it legal?
4. What if they left and left stuff behind.What do you do with it?
5. What do you do now that the tenant is gone?
6. If you have some major questions wrong, where will your new home be?
a. The Mahnoogian Mansion? (mayors house in Detroit)
b. The Hilton Hotel
c. JAIL!
Nancy Neville
@Account Closed
I was never good at quizzes lol, where do i get answers for all of this. I can google some of it i suppose. Not sure how accurate answers will be.
I designed the Quiz when I had my Landlord School. I gave this Quiz at the end of their course. And...they received a Certificate of Completion.
Here are the answers: (Pertains mostly to Michigan Law) but generally the answers are common answers and also based on my Continuing Education Courses as a Realtor in Michigan and as a Landlord myself of 13 years and hubby of 30 years.
THE LANDLORD SCHOOL QUIZ
The answers are in red but I see they are not showing up as red in this post.
1.Advertising your rentals
QUESTION:
WHAT IS WRONG WITH THIS AD?
7778 Archdale is a 3 bedroom bungalow.It features a nice kitchen, full basement and a one car garage.Rent is $750 a month.Adults only!
Cannot discriminate against children (Cannot say Adults only)
WHAT IS WRONG WITH THIS AD?
1942 Bisbee Lane is a 2 bedroom duplex.This is a smoke free building.Smokers please do not apply.
This is okay.Smokers are not a protected class yet
WHAT IS WRONG WITH THIS AD?
8259 Wisconsin Street is a beautiful 2 bedroom 4plex.The rent is $525.00 a month.Senior Citizens Only!
This is legal only if it is in a designated Senior Citizen housing community.
2.Staging your Open House
a.Should you show the home while repairs are still needed and not completed yet?
No.Always have it ready and presentable for showing.
b.How can you make your home inviting?
By having curb appeal
Plants on the inside of house
Aroma Machines – smell of baked apples or home cooking
Clean and pretty
c.What color of paint should you paint your rentals.
Basically white or off white.
Applicants have various taste.What color may be appealing to one person is not appealing to another.They want the walls to coincide with their furniture.
d.What should you bring to the Open House?
Table and chairs
Pens
Flyers
Application Forms
Receipt Book for Credit Check Fees
Criteria List
3.The Open House & Screening
a.You see 2 adults get out of the car along with their 3 children.One adult is smoking a cigarette and the two children are eating chips and one child is drinking red pop.What do you do when you see them coming up on the porch?
You meet them at the door and say politely, I’m sorry but we don’t allow food
or drinks or smoking while touring our home.
b.At what moment do you begin screening after the initial phone call?
As soon as the people get out of their car at the open house.
c.What screening methods should you use at the Open House?
Screen with your eyes and screen with your ears.
d.What do you say to an applicant that asks:“How come you’re asking so much for rent?”
It is was the market rent is going for at the present time.
e.What if they challenge you and want this house but believes you’re a dope for asking so much because it doesn’t have air, or this or that?
I’m sorry, but this is the rent I’m charging.I’m sorry this house doesn’t meet
your criteria or needs but I’m sure the next house on your list will.Thanks for
coming anyway.Have a good day.
5.How should you dress at the open house?
Casual
4.Application
a.Who needs to fill out the Application Form?
Everyone who will be living in the household who is 18 years or older.
The more people on the lease, the better chance you have of collecting your money!
b.What is a Criteria?
What qualifies your tenant for this home.
3 times the amount of rent?
Must be employed at least a year?
Have no landlord/tenant evictions?
You choose, but once you decide it must apply to everyone.
c.What is a “Tester”?
Someone who works for the Government and pretends they are a potential renter to check out your screening methods. Descrimination factor
d.What do you say if an applicant asks you if you take Section 8? Can you say no?
You can say no because Section 8 is not a protected class so far.
5.SECTION 8 Tenants
a.What is Section 8?
Welfare Program.They pay you the rent for the tenants.
b.What is FIA?
Family Independence Agency
c.What are the negative reasons for not taking Section 8?
d.What are the positives?
6.Tenant Damages
a.If the tenant calls and says the bathroom tub faucet doesn’t work and you need to come out and fix it, and you know you just installed a new kit just before they moved in a week ago, what do you say?
1. Do you shout, “You IDIOT, don’t you know how to TURN A KNOB!
2.If they can’t shut off the water tell them to turn the water valve off in the bathroom or in the basement and you will get there within the hour or within a reasonable time and then bill them for it later
3. Tell them to call a plumber and fix it themselves?
b.It a tenant calls and says, my toilet is running and won’t shut off what type of an emergency would you rate this.With 5 being top priority and 1 as no hurry?
12345 ?
c.If a tenant calls you and says her electrical outlet in the dining room doesn’t work because her lamp won’t light or her TV won’t run when she plugs it in…what type of an emergency is that from 1 to 5
12345 ?
dIf a tenant calls and says, the roof is leaking and it’s ready to fall down on my head.What type of emergency is this?From 1 to 5
12345 ?
e.What is considered Damages in a court of law and what is considered just wear and tear?
7.LEASE AGREEMENT
a.What type of Lease Agreements are there?
Month to month
Annual
Bi Weekly
Weekly
Daily
b.What topics should be contained in a lease agreement
c.When signing the lease what is required by law for you to give the tenant when you give her the lease.(3 things)
1.Lead Paint Brochure
2. Lead Signature Sheet
3.Move in Move Out Check List
d.Is it a Law that you must have a written lease?
No.It is automatically a month to month rental if there is no written lease
agreement.
e.Do you give the applicant the keys if they don’t have the full move in money?
NO
f.Do you give the applicant the keys if they don’t have the utilities in their names at the time you sign the lease, but they promise they will?
NO
g.When is the Lease Finalized?And can you or the new tenant decide to
Not sign the contract at the last minute? Yes if either one does not adhere to the qualifications set forth prior to signing the lease.
When you SIGN the lease and turn over the keys
h.If they try to pay you by check, do you accept it?
NO They can put a stop payment on it right after they leave or if you turn them down.
h.What if a tenant has a pet and you allow pets, but they have a Pit Bull. Would you accept it.If not why and how would you tell them?
Pitt Bulls usually will cancel your property insurance.Pitt Bulls are on the dangerous pet species.
8.The eviction
a.When do you send your tenants a 7 Day Notice to Quit?
The very first day rent is late.
b.When can you file it in a Court of Law?
You must allow 2 full days if you mail it
One full day if you hand deliver it
c.When do you charge a late fee and are they legal?
You can charge a late fee the very first day rent is late.
d.Can you charge a per day fee in the State of Michigan?
Yes, but don’t go over $3 a day or the Judge will not look favorably on you
e.When are the papers called that you file in the court house after the 7 day Notice to Quit time period has elapsed and it’s time to file?
Summons and Complaint
f.What happens when you take these papers to the court house and file them?
A court date is set within 10 days from the day you file and the tenant is served
g.If a tenant wants to pay part of the money before their court date, do you take it?
Absolutely not!They must pay it in full.If you accept a partial payment your case is dismissed.
h.If they try to pay all of it by check, do you take it?
NO they must pay in cash.They could cancel the check.The check could bounce.
i.When you go to court what do you bring with you?
Your copy of the summons and complaint
A judgment form
An Escrow Form
j.What happens if a tenant doesn’t show up?
You win by default
k.What happens if a tenant does show up?
They will either consent or contest the law suit.
If they consent, you both get out of court early.
If they contest you go before the Judge
l.After you have filed the paperwork in court and have a court date scheduled, what do you do next?
a. Call the tenant continuously asking where is my money?
b. Go there in person and say where’s my rent
c.Call them up and warn them that they better have the money or else?
d. Sit back and let the courts do their job?
9.COURT
1.When you go to court how should you dress?
Neat.No jeans.Some courts won’t allow it.You want to look professional.
2.What is the very first thing you need to do when you arrive at the court house?
Go to the room assigned to you on your receipt when you filed the summons and complaint and register with the clerk.
3.If you go before the Judge do you do the following
a.Stand there with your hands on your hips and stare at the tenant?
b. Chew gum and pop it
c.Yell out You’re a Liar when the tenant is talking
d.Stand there quietly, professionally and have all your paperwork
ready and wait until the Judge acknowledges you.
4.What should you bring with you to court to make you a winner?
Tenants Lease Agreement
Work Orders and proof of repairs
Print out of tenant payment history
Pictures of what the place looked like before they rented it
Pictures of damages if it’s after the tenant moved out.
Witnesses
And study study study before you go to court.
Be well prepared ahead of time.
5.What happens if you win?
You receive a Judgment
6.How many days must you wait before you file a Writ
If tenant doesn’t move by the date on the Judgment you file a Writ the very next day.
7.What happens when a Writ is issued?
A Bailiff will remove the tenant from the property.
8.Whatmust you have ready the day before the a Bailiff comes out to remove the tenant from the premises?
You must have a roll off container dumpster there the night before the Bailiff comes out.
How long is a Writ of Restitution good for?
56 Days
10: AFTER THE EVICTION
1.After it is all over and you are allowed to go back into the house and you see some pretty bad damages do you..
a.Throw your hammer across the room and stomp your feet?
b.Do you cry and say I quit?
c.Do you take pictures and document everything so that you have evidence to keep their Security Deposit?
d.Do you burn down the house?
11. SECURITY DEPOSIT
1.Can you keep the tenant’s security deposit?
Yes
2.If so, why?
If they owe for damages and you send them an Itemized statement to their last known address you may apply the Security Deposit to their damages.However,
If they contest it you willhave to go to court
3.And if you can how do you make it legal?
You have 30 days to notify the tenant that they have damages and that you have applied the Security Deposit towards the damages. You have 45 days to sue for the Security Deposit if the Tenant contests it.
4.What if they left and left stuff behind.What do you do with it?
You must store their stuff for 30 days in a holding place.But basically they just leave junk.Take pictures and document everything.Throw junk away if that’s all there is …is junk.
5.What do you do now that the tenant is gone?
You begin doing it all over again, fixing it up and renting it out.
6.If you have answered any of these questions wrong, where will your new home be?
a.The Mahnoogian Mansion? (mayors house)
b.The Hilton Hotel
c.JAIL!
I'm sorry I don't have a school any more. I posted it to help. I"m sorry I will try to delete it.
Nancy NEville
When you do buy your first property, advertise it right away. Maintenance and cleaning work done on the property, while it is advertised for rent, can be expensed (for the most part) that year. Work done prior to it being 'in use' have to be added to your cost-basis and depreciated over 27.5 yrs. As a new investor with this many questions, I would get a QUALITY realtor to help me @Eric DeVito!
Steve, just to clear it up. Should I advertise even during repairs made to house? Painting/Sheetrock, flooring, etc.. If so do I include that in my advertisement or should I wait until about a week prior to all repairs being completed.
@Eric DeVito, I am not a tax guy, per se, so please recognize that. I mentioned maintenance and cleaning expenses. Sheetrock and flooring would be capital expenses anyway. I would do the heavy (capital expense) lifting before I advertised for rent. Renters won't be able to see through all the work needed anyway if you put on market too soon. This issue is just a side note I wanted to add. Your other questions regarding getting a realtor, how to analyze property, what lease to use, how to collect rents, etc are more important IMO.
Thank you Steven. Those last couple of issues you mentioned I am close to figuring them out. I have a realtor, Ive analyzed a property I am interested in, I found some lease agreement forms for free online. I just have to figure out what type of rent collection will work best. Thanks for the help!
You should get insurance
then contractors bids
Do the outside of the house first
They might not need utilities turned on until the contractors start working inside the house
You will be paying for utilities until you find tenants to move in
Is the property close by? If so then you can do it yourself. If it is out of the state then get a realtor.
You can create a separate bank account and have the tenants place the checks in there. If it is more than 15 units then its best to get a property manager.
There are websites that have sample leases for each city. Use those and add what you want as long as it is legal. For example the one that I live in I put in no pets, no smoking, no sublet, no waterbeds, no inflammatory speech displayed in window, can't use the roof, decorations must not destroy walls. I let my lawyer look over the lease as well.
@Eric DeVito. You're welcome. When I had a smaller # of units, I just provided my tenant(s) with addressed envelopes. With just one, I would even put the stamps on it for them. I put my address on stickers or pre-printed on the envelopes and gave them 6 or 12 at the move-in. They'll have no excuses not to pay or be able to say it was 'lost in the mail'. I've also had good luck with providing deposit slips to your bank, but that can involve additional risk.