Landlording - Regulations/Contracts/Tenants

11 Replies

Hi BP!

So I feel like I never find much info on this or not really what I’m looking for when I do come across info. Maybe someone with more experience can help.

When you become a landlord really what is your number one resource for rental agreements, ensuring you are meeting all regulations in your local state/city/muni, if section 8 is involved learning and ensuring your meeting all those requirements as well.

Also when getting into a property how are you truly ensuring you have really solid numbers on rent rates at current as-is vs if you were to fix the place up. Is this something similar along the lines as how you would come for a rehab but with rental history? What does that look like?

I know I have a lot loaded into so thanks in advance for anyone willing to tackle it!

@Anthony Greco My suggestion is to read “the book on managing rental properties” on BiggerPockets. This book will have you well versed in all area of managing your property and they also give you documents and websites that will help you. Everything you just asked about is in that book, trust me!

@Anthony Greco go up to Bookstore > Lease Agreement Package and you'll find documents that were developed by actual BP investors, tailored to your state law, and vetted by an attorney. You can buy them or upgrade to a PRO membership and they will be included with your membership.

It's important to learn your state/local laws and stay on top of them so you can refine the lease and operate within the boundaries of the law. I'm sure you have many local real estate investor groups in Vegas where you can network and learn. i highly recommend you rub elbows with other investors and hopefully find a mentor.

@Anthony Greco For rental agreements, any one of the following three sources should work and be able to provide you with an agreement that fully complies with your state’s laws:

1) The residential lease agreement put out by your state’s Association of Realtors. 

2) A custom lease agreement produced by an experienced landlord-tenant attorney in your area. (Note: It’s been my experience that the most experienced landlord-tenant attorney in your local market will already have such an agreement that they use which has been crafted and fine-tuned over many years of learning what works and what doesn’t in that specific market. This can be invaluable and also cut down on the cost of creating such an agreement from scratch.) 

3) BP now has state-specific landlord forms and lease agreements. 

When it comes to Section 8, you don’t need a separate lease agreement. You can just use the same one you use with your non-Section 8 tenants provided it complies with the laws of your state. 

@Anthony Greco For rental rates ask an agent to pull the data for you. Are you using an agent to sell your flips? This person should be able to pull rental comps for you as well. In Vegas we're fortunate that a lot of rentals are done via the MLS, so there's good data there. A lot of markets don't have as good of data available.

Thanks for the replies!!!

@Phillip Dwyer I actually comp out the properties with MLS myself.

I don’t have experience personally with rentals though and for example if you were to get a property with a value add proposition, how would one go about finding what their potential rent rate could be if most of the other product in the area is done subpar at best.

Rentals especially if section 8 is involved seems a little daunting with all the little rules about everything they have. How is one to really keep up on all of those rules and regulations when it seems like an encyclopedia of information. For me it almost makes properties that can’t support full time property management company not make sense. I know well enough that keeping up on something like that is not my strong suit personally and I would need to hire someone to manage that portion of the business.

Also a little off topic but if anyone knows a good resource about syndication that does more than just talk about how good it is and why and the basics and actually explains more about the details of setting one up, the format, regulations you have to comply with etc I would be super grateful for being pointed in the right direction.

@Anthony Greco  Sometimes when you run across a data set like the one you mentioned, that's a red flag. That might mean that the improvements are not financially feasible:  that the tenant base is unwilling or unable to pay any or much more for rehabbed properties.  On the other hand, you may just need to dig deeper by going into similar neighborhoods, checking farther back in time, or look at a different subset of homes in the same neighborhood that do show improved versus non-improved rentals.  

I don't believe you're over thinking it.  This is an important part of the game.  People often over or even under improve properties, because they didn't take time to research the rental data.

Start with the state rules and regulations. Also, remember that statues (the published laws) always trump what you have in your contract. So, just because you add something to a contract and the other side signs does not mean it will work in court.