New Landlord Advice...what changes can we make?

Question

We will be landlords in about 10 days if all goes as planned.

Question 1: Do you know if we can add an amendment to the rental agreement that is currently in place? The agreement doesn't stipulate a late fee for late rent payments and we'd like to add one since the payment history shows they have been 7-10 days late quite frequently.

Question 2: What other things do landlords typically do once they've bought an established property with tenants already there?

What changes can we legally make?

Your help is appreciated.

Jackie

Thomas S. · Answer

The first thing you must do is study and learn all your state landlord tenant regulations. That should be done before you start your business. You have 10 days.

Your regulations will likely say that you may not alter or modify a existing lease without the tenants approval. Each state has specific regulations that cover all aspects of your business.

Probably can not make any changes. When it ends it will automatically become M2M which should be your prefered lease agreement to best protect your investment.

Learn the codes and post for clarification specifically from Illinois investors.

Jackie Badiali · Answer

@George Skidis thanks so much for the very insightful tips. I took notes!

George Skidis · Answer

@Jackie Thennes

1. Join a local Real Estate Investor Association.  Huntley is about half way between Chicago and Rockford. In Rockford you want Paul Arena and the Rockford Apartment Owners Association. However, if you can get to Lombard Jane Garvey runs the Chicago Creative Investors Association and here group is huge.

2. Get to know the laws not only of the state of Illinois, but your local municipality. IS it Home Rule or subject to state law.

3. Give notice to the residents IMMEDIATELY upon closing. They could send the rent to the old landlord and cause all sorts of grief. If possible have the old landlord go with you and introduce you to the residents.

4. Give no credence to the rent roll at closing. It is a rough guideline at best but I have received a few that were not exactly accurate.

5. Be friendly with your new tenants but never become friends. Friends are expected to waive late fees and "work" with you.

6. Introduce yourself as the new "Senior Leasing Specialist", "Resident Liaison" or whatever. Never admit to being the owner. Never use the terms "Agent",  "Owner" or "Property Manager" in person or in writing. A friend of mine up your way is in court right now since the Realtors and the Illinois Department of Professional Registration are objecting to her using the term "Property Manager"on her web site. Costing her thousands so far.

7. Get Mark J. Kohler's book "Lawyers are Liars" and avoid some of the Real Estate Guru scams.

Deanna McCormick · Answer

Current lease tenant has will transfer to you on date of sale.. you will need to honor this lease until it expires..the lease will state that... but you need to know when and how to give notices.. and what your responsibility as a landlord is.. download your state landlord tenant laws.. give your tenant a new contact form for him to fill out and return to you, and schedule a walk thru of the unit within 2 weeks of ownership,, this is now what YOU can set damages on from your date of ownership. so do a condition sheet checklist and give him a copy of that.

Provide him your contact information , emergency contact info. and how to pay his rent to you the day you take over.

Bettina F. · Answer

We sent a new owner letter introducing ourselves and stating that we would be meeting with the tenants within 2 weeks to inventory any maintenance needs and to go over our rental agreement.  We kept the terms the same for the inherited tenants on leases (date lease is up, monthly rent) but we  toughened up and clarified rules.  The tenants only cared about the monthly rent, and lease term.  Most were grateful that someone was finally addressing their maintenance needs and that we were improving the property.   The chronic late payers were not happy that we were enforcing timely payment and late fees.  They were "rehomed" as soon as their leases were up.

Jackie Badiali · Answer

@Yulia Jenner wow that's interesting. So because there was no lease, you were able to do another lease and increase their rents. Glad it worked out. I will check out the landlord kit also.

Jackie Badiali · Answer

@Robert Richardson thanks for the information! Just found out our closing tomorrow is cancelled. Couldn't get transfer stamps because there is only one water line but 2 meters. City can't shut off one line without shutting off water to both units. Oh well... we'll see what happens.

Jackie

Yulia J. · Answer

I forgot to mention we live in one of the units of our property.

Yulia J. · Answer

We inherited 2 tenants last year. Their lawyer provided us a letter stating that so and so are new owners and please pay rent to them now. We got all we could from the seller which was not much, some old applications, not even leases. Renters were m2m in thin air:) So first we did was introduced ourselves, dropped lawyer's letters in their mailboxes. In one month we asked the tenants to complete new applications and told them we were increasing the rents (their rents were waaay low) and what we planned to do to the property in terms of improvements.all in writing of course and following the laws as for the timelines. Then we signed leases with them.I googled information about landlording beforehand.I also bought a landlord kit at Staples.We didn't do any criminal or other checks for these tenants because they were very long term with no issues and had paid on time.

Robert Richardson · Answer

Hi Jackie, we are new landlords with inherited tenants too.  We are learning everyday.  We bought a very distressed property with lots of problems, so everything is a challenge.  We signed new leases with out two tenants and so far everything is going smoothly with them, it is the city and the contractors that we are struggling with.  Best of luck to you!  By the way, there is a great real estate association that I joined called WCRT.  You can find their website at wcrt.org and their facebook page wcrtchicago  What I like most is that no one will try to sell you anything, except their $20/month membership.  They have monthly meetings the first Thursday of every month in Villa Park and have other subgroup meetings all over chicagoland.  I went to one on Tuesday where we sat at a bar and played Robert Kiyosaki's game Cashflow 101.  It was great!  If you go, please mention that I sent you.  Good luck with your business.

New Landlord Advice...what changes can we make?

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