First Time Landlord Needs Advice

35 Replies

We are about to endeavor in the landlord world. We just listed our property for rent on Monday and have a lady coming to look at our home tomorrow evening. Is there anything I need to do to prepare for her visit?

She talked about wanting to do an 18 month lease or longer. Do we charge a little less if she signs a 18 month or 2 year lease? I was thinking we would take $50 off our asking price of $1600/month if she signs a two year lease.

Also, she wants to rent our home a month before we listed it available (December instead of January). I don't want to say no, but we really wanted to spend the holidays in our home. This just comes down to what is best for our family, but we also want the right tenant. Pretty torn here, as we are moving across the country and will be our last holidays in our home.

Its really personal preference. I don't see why you would be eager to drop the price though. Most likely she wants a two year lease to avoid a price increase, and is happy with where its listed at now. 

In regards to having her move in early, she will probably wait it out if you say no. Have a talk with her and ask, if she cant wait a month then you have a decision to make. 

Biggest thing to remember, DO NOT come off too friendly, even if the tenant seems super nice and friendly. This is a BUSINESS transaction. Do not agree to make any changes to the place to accommodate the tenant. Quickly get rid of any emotional attachment to the property. Decisions based on emotion and not business logic will cause you to make mistakes every time. It's INCOME PROPERTY, not a primary residence.

@Brenna Wood Congrats on your first rental property. From the reading it sounds like you will be moving to another location and renting out this house. We did that as well when my wife and I started our real estate journey. 

1) If she is signing a longer lease, I would actually increase the rent slightly and say that you will not have to worry about us raising the rents every year and that it will actually be give you and her a more predicable situation as she wont have to worry about her rent being raise in a year and her having to find a new place. 

2) Personally one of the hardest things to do when we turned our primary into a rental was to let go of the idea that its "our home" and its now a business. So the faster we removed our personal feelings from the house the better we were as then we could treat it as a business instead of a house our family lived in. This prevented us from over improving for a place that "we were" living in vs a rental. So personally I would advice to build some new memories at your new spot. 

3) Talk with the tenant as much as you can to understand her/his personality and what they will be like. This will give you an idea of how much involvement you will be expecting once they rent. Are they complainers, do they know how to fix things, are they clean or messy. etc. things that a credit report and pay stubs really don't tell you. 

Hopefully that helps.

Cheers. 

Hate long term leases..... great for the tenant.....crappy for landlord. They make you feel all warm and fuzzy that your have a tenant "locked in"... you don't. If they want to leave, they leave and good luck getting the $$. If they make your life miserable and you want them gone...good luck.

Yes it gives the tenant more "freedom" to leave.....but it also makes them "fear" that if they mess with you, then you get to kick them out very quickly. For me the power to quickly say "get the F out", far outweighs my concerns that a tenant might leave for "greener pastures"

Sorry to be a downer here, but be very wary of tenants wanting to sign long-term leases and who want to move in early.  It might sound like music to your ears, but a lot of times they're just telling you what they know want you to hear just to get their foot in the door.  Don't grasp for the first person to walk through your door as your future tenant.  You have to kiss (screen) a lot of frogs before finding a prince of a tenant.  Given that you'll be moving across the country, be VERY careful when screening prospects and only sign a lease if your background screening pans out and you have a good gut instinct on them.  Make sure you speak to their current landlord (If possible) and employer. Good advice from all the posters here, but @Ray Harrell is spot on.  This is a business; tenants are not your friends, and, like with your kids, learn to say "No" very early on in the relationship.  P.S.  And enjoy your last Christmas in your home with your family.

I have a Jekyll and Hyde personality when it comes to tenant screening.   I am a sweet Dr. Jekyll during advertising and showing, but as soon as someone actually applies, I turn into a very skeptical Mr. Hyde.  You are turning over an asset worth hundreds of thousands of dollars to a stranger.  You need to be prepared.

Do you have your screening process and provider in place?  Are you checking government issued photo ID to protect yourself against ID theft?  Ask the applicant to bring her ID with her along with a recent paycheck stub.  Bring a computer printer/ copier with you to the showing and copy her ID and paycheck stub.  Are you charging an app fee? (you should)  Collect as much information as you can during the application process - but forget to get a signature on one document (like the release of information to check prior LL references).  This will give you a good excuse to drop by her current residence to grab a quick signature.  Even if you stand outside while she signs the form, you can sniff for cigarette smoke or cat pee and  listen for undisclosed dogs or occupants.  Remember, your house will look and smell like her current residence within 3 months of her moving in.  

She will give you a phone number for her current LL and employer.  Look her LL up on your county property tax records, to make sure she is not living with relatives.  Look her current employer up on Google, and call THAT number and ask for her supervisor.  Search her on Facebook to see if she has just posted a photo of her new puppy or if she is excited about her BF soon being released from prison!  Do you know how to look up applicant's criminal history in your area?  Get several emergency contacts and have her sign a form naming a person who can come get her belongings "in the event of unanticipated prolonged absence"  (death or incarceration!  -- don't laugh -- it happened to one of my tenants!)

Good tenants have stories that make sense and things check out easily.  I think it is a red flag that she wants to rent your place 3 months ahead of time, unless you are in a very hot market.  I am also wary of her desire for such a long lease.  Do you have an inspection clause in your lease, and have you made arrangements for a friend or relative to do a video inspection every 6 months? 

Good luck.  I do not want to freak you out, but I do not want you getting scammed, either.  The worst scam artists are highly charming people.  Be skeptical.  If you decide to go with her, collect a holding deposit NOW, and have her sign a Holding Deposit Agreement.  The deposit should be non-refundable if she decides not to rent your house, and convert to the Security Deposit if she does rent your house.

Thank all of yall for the advice, as we are first timers here and greatly appreciate the input!! We are going to purchase the BiggerPockets landlord package that includes all of our forms for Louisiana rentals.

@Brian Ellis spot on, thanks!

@Ray Harrell You can read the emotional attachment in my post, thanks for the reminder. I needed to hear this as we have some great memories in this "income property" (I'll have to get used to saying that!) Will also work on being too friendly, it's mostly my husband who is. I can be a stickler!

@Drew Y. We are moving from Louisiana to California! We really don't want to tell the tenant this or get into any personal info really! (1) My husband already pitched the idea to her about this, so I'll just have to tell her that he didn't discuss this with me and the answer is no (2) Definitely agree that we are emotionally attached to this "dwelling" and have to see it as a rental property and not our home (3) We will talk with her, but I don't know how to avoid the small talk about us, I don't want to give her very much information and want to deflect all of her questions about us.

@Ned J. The only reason we wanted to do a longer term is that we will be across the country next year living there. But now this is a good point and maybe since my family is here and we will be visiting, we can schedule a trip to screen new tenants when that time comes. Thanks for your input.

@Caleb Heimsoth Thanks she is coming today. Will update!

@David Cruice We aren't leasing until January, and this is the first potential tenant we are showing our property to. I listed it very early so we could screen everyone! Thank you for the input. I agree with Ray too!

@Bettina F. Great example of what I want to be - short and sweet during screening, and forward after! We are charging an ap fee of $35. I had a good laugh at her BF getting out of prison, but you are absoutely right. I am a weary one to begin with, so I will do my cyber homework on anyone we screen!

Don't share ANY personal information. Don't even tell them you are moving. Tell them the unit is occupied and will be available in January. Tell her to take a good look around because the current tenants don't like a lot of people coming in to see the place. COMPLETELY detach your SELF from the PROPERTY. DO NOT let on that you are a first time landlord. Lie...tell her you have to show a few more properties later today, and have to attend an eviction hearing Monday. Come across as if you have been doing this 20 years. As soon as she asks, "Can you do..." respond with "The property is being rented as is less personal belongings."

I'm telling you this...DO NOT come across as the friendly neighbor. You are now a landlord!!! When I first started, my first tenant asked for something, and I figured I'd be nice and give it. They ended up complaining about everything and only paid the first month's rent in full. He moved someone else in on top of that. DO NOT be friendly.

Brenna, we know this is your first one and you do have a month or two before you absolutely have to make decisions and renter selections. We always screen fully before we schedule a showing; otherwise what is the point of meeting someone. I would encourage you to assemble the docs from this site-application forms, leases etc. We email or otherwise communicate callers our minimum criteria, income, credit rating ect. to discourage frivolous lookers. No one gets a meeting or showing until we have thoroughly vetted that person or persons. Be extra careful meeting 'strangers' in your home. I would encourage you to have a friend present if you have ANY misgivings whatsoever. Also, think about how you will perform inspections every six months I failed to do that once and it cost me plenty! All the best!

@Brenna Wood don’t  invest any time or emotional capital in a potential tenant until you’ve done your credit/background check.  I would bet you she won’t have a reasonable credit score based on what she has already said.

Red flags include..

I want to move in early....

I want to do a long term lease...

I will pay you in cash....

I will pay a double security deposit...

I will pay multiple months in advance.....

These are big reds flags that applicants will use to sweeten the deal to cover for something else..... its the carrot to lure you into the trap. They are often horrible tenants that will dangle that out there to blind you to the other shortcomings they will have.... horrible credit....an eviction...... a previous landlord that will rip them....and on and on.

Brenna, another alternative for you since you will be far away from this now rental property is to hire a PM, and let them handle the situation. You being new and far away may not be the best combination for your 'first time'. All the best!

Hi @Brenna Wood . I am also a fairly new landlord and took lots and lots of guidance from BP before jumping in. One thing that helped me maintain sanity during showings is I made an informal screening questionnaire on Google Sheets and asked everyone who showed interest to fill it  out. It asks for essential info like credit score, bankruptcies, criminal history, eviction, salary, where they work, if they have pets etc. 

The Google sheets is easy to pass around and costs nothing. I made it clear that there will be a paid background check later on to verify all info.

This gave me a great way to pre-screen people before scheduling any viewings at all. I would say 50%+ people who email me end up filling that form and out of those I end up eliminating 50%+ due to various issues.  

The remaining ones I get back in touch and set up a two hour time window for them to show up - no individual schedules. Anyone who doesn't show up during this window is automatically ruled out.

I find that with this method, it saves me time and shows me who is respects my time by following instructions and showing up on schedule. 

Thanks everybody! We bought the BiggerPockets landlord package with Applications, Lease terms for LA, pet policy, addendum's, etc.

The potential tenants (first ones to see our property) came this evening and I gave them both an application and said it would be $35 each to do the background check. They are a sister and her son, brother and finance. The sister and fiance came and we said the brother could come on Sunday when another potential tenant views the property (the lady who I thought was coming tonight is actually coming Sunday).

We sent them a follow up text message saying the qualifications to lease before we do the background check - gross monthly income $4800+ ($1600/month rental), favorable credit history, employed and pay stubs required, good references concerning rental payment, housekeeping, and property maintenance from ALL previous landlords.

Her only question was if the income was combined (all 3 adults) or individually. We said combined, and she said she would get up the applications with the fee by the weekend.

Last thoughts: We pictured a single family moving in, but I guess the tenants don't have to be what we imagined. I don't see anything completely wrong with it. The couple will get the master, the mom and son will each get a separate bedroom and share the hall bathroom. One lady works at a plastic sugerons office and the other at the local hospital. Any thoughts on this dynamic?

Thank yall again for this information and pointing out that we need to prescreen everyone.

We also sent the prequalifications to the lady coming on Sunday (who a few of yall said red flags because she wants to move in a month early), and this was her reply. She said her salary alone is $80k plus she receives child support. She can provide excellent references and works at a retirement community for 2 years..........

"I wouldn't want to use my current landlord because I won't want to give her notice of my intent to leave until I have a lease agreement signed and ready to go. And I planned to give her 60 day notice. My credit score is not high. There is a debt that my ex-husband is responsible for that is affecting that. I have the property settlement from the divorce that supports that. That debt will be satisfied in full by the beginning of 2019 and I will be able to repair my credit but for now, its an unfortunate situation."

RED FLAG about the whole “don’t want to let my landlord know” thing. It’s a screening MUST. Not your problem. Let them know you need to call. Period. Also, how bad is the credit? Someone’s credit is an EXACT picture into their habits regarding paying bills / debts. We do not accept anything less than 650 which I fell is VERY generous. Business is business and should not be compromised by excuses.

Originally posted by @Brenna Wood :

We are about to endeavor in the landlord world. We just listed our property for rent on Monday and have a lady coming to look at our home tomorrow evening. Is there anything I need to do to prepare for her visit?

She talked about wanting to do an 18 month lease or longer. Do we charge a little less if she signs a 18 month or 2 year lease? I was thinking we would take $50 off our asking price of $1600/month if she signs a two year lease.

Also, she wants to rent our home a month before we listed it available (December instead of January). I don't want to say no, but we really wanted to spend the holidays in our home. This just comes down to what is best for our family, but we also want the right tenant. Pretty torn here, as we are moving across the country and will be our last holidays in our home.

I don’t show my rentals until after the person has paid for a background check via Cozy dot com and have filled out the first page of our rental application