Moreno Valley, CA · Member since 2018 · 45 posts · 5 votes
Hi BP Family!
I’m looking for a tenant lease agreement contract in California. Any suggestions on where I can find one. My dad has tenants and he never had a contract agreement for them. He’s not even making money. I’m stepping in and helping him out so I can control the property management and getting new tenants if they don’t agree to sign the contract. His mortgage is 1150 and charging his tenants 1150!!! They rents in the area easily go for 1600 average on rentometor. Yes he’s a bad landlord, so I’m going to jump in and help/save him, I just started getting into real estate investing, so now I’m out there asking my parents and everyone I know who is a landlord to gain knowledge. Unfortunately my dad needs the knowledge and help. I would love your feedback!!
Thank you in advance!!!
Realtor · Mountain View, CA · Member since 2017 · 120 posts · 108 votes
8y
@David Flores I think the lease from California Association of Realtors is the best one. However, it can not be used without a realtor being on one end. It covers more than most other lease forms do and has the language that is required to do things properly. I would suggest you look at it and make sure whatever lease you use has all of the same points. If you message me I can show you an example, You just can't use it as is since it has my name and CAR on it.
Investor · Riverside, CA · Member since 2015 · 280 posts · 111 votes
8y
You can use a off the shelf lease agreement then customize it as needed. Make sure you cover everything from rent due date to what is and is not allowed on the property. The first thing I would do is get a idea of local rent prices.
Google Californian landlord handbook. It’s a PDF format. Print it and read it
Regardless of what you do you’re 30 to 60 days out from any implementation of any rules. 30 days if the tenant has been living there less than 12 consecutively months or 60 days if the tenant has been living there over 12 consecutive months.
Any rent increase over 10% requires you to give 60 day notice. If they’re over 12 months living there you can do a rent increase over 10%
Go over there and do a inspection of the property.
You’re never going to get a 1150 a month tenant to pay 1600. I doubt they can withstand such rent hike.
Best thing is to let them down easy. Dads not feeling good we’re looking to sell. We are going to give you your deposit back as long as the hose is in good condition.
Realtor · Mountain View, CA · Member since 2017 · 120 posts · 108 votes
8y
@David Flores I think the lease from California Association of Realtors is the best one. However, it can not be used without a realtor being on one end. It covers more than most other lease forms do and has the language that is required to do things properly. I would suggest you look at it and make sure whatever lease you use has all of the same points. If you message me I can show you an example, You just can't use it as is since it has my name and CAR on it.
Moreno Valley, CA · Member since 2018 · 45 posts · 5 votes
8y
@Rob D.Thank you, awesome advice! I didn’t know any of that. I honestly thought I can just give them a boost rent however we can since we had no contract. I can’t lie about my dad being sick because the tenants are actually church members of ours. Although my mom and dad do agree that they are bad tenants and we should try to get them out. How can I find out exactly how much the rents are going for around the neighborhood? Is there a website you recommend or use?
@Rob D.Thank you, awesome advice! I didn’t know any of that. I honestly thought I can just give them a boost rent however we can since we had no contract. I can’t lie about my dad being sick because the tenants are actually church members of ours. Although my mom and dad do agree that they are bad tenants and we should try to get them out. How can I find out exactly how much the rents are going for around the neighborhood? Is there a website you recommend or use?
Since there is no written contract you fall under what’s called a verbal lease. The rules that are in effect are the state laws on landlord/rentals rules. I took the liberty of including a link. http://www.dca.ca.gov/publications/landlordbook/catenant.pdf You can also go to Nolo.com and get the layman version of California housing/rental laws. But you gotta pay for those books. It’s a rental expense so it’s deductible.
If you all agree they are bad tenants than I would go with were looking to sell or were moving back in the house. Ultimately give them whatever plausible reason you want that gets them off easy and moving with the least issuse. The idea is to get them out with the least amount of problems. And if they have cheap rent all these years they are not going to be very happy about getting their ticket punched.
The rental market I would go to Zillow/Trulia. They take the MLS listings anyway and realist them. Go filter the listings to your comps and you should get a idea of the going rate. You can price yourself slightly lower than going rate (50/100 bucks) to attract more applicants. My advice to you is to sear this into your brain. "I will learn to say no thank you. It's far easier to say no than to go through a eviction and the aftermath."
To start you want to
GET A ACCEPTANCE POLICY WRITTEN DOWN.
example
credit score must be above 680
Income three times rent amount
Income to debt ratio no more than 45% (ultimately you want to make sure you get paid so if the guy has a 75% DTI and the rent is 35% of his income you're not getting paid)
No judgements
No criminal record. (This is really up to you as what you’re willing to accept. )
Must have x amount of time at a job (up to you for a timeline but ove4 a year should be ok)
No pets or you accept pets. I prefer no pets bu5 will take a pet from a exceptional tenant. I usually add $500 to the deposit. There is no nonrefundable deposit in California. I charge a additional security deposit. Legally in California you can take up to two months worth of rent amount as a security deposit if the rental s unfurnished or three months amount for security deposit if th3 rental is furnished. Or anything in between. I usually take about 40% over the first month rent. This gives the tenant a idea that they now have some skin in the game.
Interview interview interview,
My most recent property I literally turned away about 95% of the applicants due to low income or bad credit. I simply no longer wish to deal with such customers and I just decline. I have a prescreening questionnaire which pretty much eliminates about 75% of the inquiries. Either I never have to send it because within a few questions o can qualify them or I send but never get it back. Which is fine with me. It just means that you probably weren’t serious or were not gonna pass or were hoping to scheme your way in.
Even the ones that pass the initial have been declined. I had people driving up in 80,000 luxury cars and have horrendous financials. I don’t waste my time. I decline and move on.
Obviously you want a background check company. And you want to separate the rental books/checking account from personal books/checking account. I’m not sure how you guys accept rent and if you just jumble it all together with personal income
If you have any questions on specifics you can pm me.
Moreno Valley, CA · Member since 2018 · 45 posts · 5 votes
8y
I appreciate you from the bottom of my heart and taking your time in doing this for me! I hope I can repay you back some day, honestly! God Bless You and your Family!
I had mine written by a RE lawyer because I have some HOA and non HOA properties so I wanted a bit more customization. Before that I used a off the shelf and just added in what I wanted as additional info
I appreciate you from the bottom of my heart and taking your time in doing this for me! I hope I can repay you back some day, honestly! God Bless You and your Family!
You’re welcome. I know what it’s like to struggle with rentals and learning as you go. Some lessons were expensive. If you have any questions feel free to pm me
Attorney · Orange County, CA · Member since 2017 · 242 posts · 99 votes
8y
@David Flores, I've seen many promoting the CAR form lease agreement on here. While that is generally a good form, it is missing a few important items. As a generalization, the CAR lease agreement is fairly balanced while the California Apartment Association lease agreement is more favorable to the landlord. If you use the CAR lease agreement, I would suggest that you modify it to mandatory rental insurance with the premium paid by the tenant.
Moreno Valley, CA · Member since 2018 · 45 posts · 5 votes
8y
@Bryan Zuetel, Thank you Bryan. Appreciate your advice! I will definitely look into all of these forms an indicate which will suit us best. You guys are all awesome!