All Forum Posts by: Jeff Copeland

There is much more involved than printing and signing a new lease.

For us, this process starts at 90 days out with in inspection of the unit and a market rent analysis. 

We then share that info along with a proposed renewal offer to the landlord for review and approval. 

Once the landlord gives it a thumbs up, we begin the process of presenting the renewal offer to the tenant (target is 60+ days out). This normally requires a lot of back and forth and "hounding" of the tenant to answer their questions, address their concerns, sometimes go back to the landlord for a clarification or negotiation, and ultimately get an answer from the tenant as to whether or not they will be renewing. 

Only then, after 4- 6 weeks of the above administrative effort, do we prepare a new lease for the tenant and get it out for signature. And often just getting the signatures can take a monumental effort!

A complicated lease renewal, with a lot of back and forth between PM and landlord and PM and tenant, then the admin work required to prepare the lease and hound everyone for signatures, can easily take 5-10 hours+ of staff time. 

To answer your question, no $150 will not even cover the PMs costs. 

BTW - Isn't the lease renewal cost specified in your PM Agreement? This is something you should have reviewed, agreed to, and signed off on at the beginning of your relationship with your PM.

I'm a broker in the Tampa Bay area, and I'm of the opinion that no special skills are required of your agent to present an offer that includes seller financing. 

Yes, you need an investor-friendly agent who understands investment property underwriting and understands financing in general (but you'd need that even if you were using "normal" financing). This post may help clarify what I mean (you might even consider sharing it with your agent): https://www.biggerpockets.com/...

Admittedly, wraps and subject-tos are more complex. But seller financing is relatively simple; In many ways simpler than conventional or commercial financing. 

1. Hire an attorney. It will be much cheaper than the lost rent, vacancy, and turnover costs you'll eat if you get this wrong. 

2. What does the lease say abut being "binding upon the heirs, executors, administrators, and successors" or something to that effect?

3. (Depending on the answer to #2) - If the heirs are claiming the lease is still in effect and they are keeping possession of your property under the terms of the lease, then the estate will be paying you rent under the terms of the lease. They can't have it both ways, and they can't keep possession of your property without paying rent. 

4. A reasonable compromise is perhaps to put their stuff in storage while the estate hashes it out. But make sure this is done correctly with an inventory, etc. You don't want the heirs claiming you stole the estate's $50,000 diamond tiara. Your attorney should be able to help coordinate this. 

5. Hire an attorney. It will be much cheaper than the lost rent, vacancy, and turnover costs you'll eat if you get this wrong.

6. Hire an attorney. 

There's obviously some great info already in this thread, and there are also two competing opinions. 

What this all boils down to is What will a judge consider reasonable if the tenants take you to court?

It's almost universally agreed that nail holes from hanging pictures is normal wear and tear. The fact that you don't know the paint color and can't get a good color match is on you as the landlord. Whether or not the tenants had patched the holes and tried to touch up, you'd still have had to come behind them and do the same thing, and you would have had the same problem. So I agree with some of the other posters that this isn't the tenants' fault (and I think a judge might agree). 

In my experience, color matches rarely work. When you don't know the exact paint color and sheen, you will eventually end up repainting the entire wall, room, or house (which, BTW, is why I'm a big fan of a standard paint color and materials list for property managers and landlords). 

Likewise, $825 for cleaning is unreasonable. 

What a lot of people miss is the fact that underlying all of this is what your state laws say about landlord-tenant disputes. Many states (such as Florida, where I am, and apparently Oregon, where you are) say that whoever loses in court not only pays the damages, but also pays the other parties legal fees. 

When you couple that with the fact that there are plenty of attorneys who specialize in these cases (security deposit disputes are one of the most litigated areas of landlord tenant law) and would take this case on an contingency basis if they think they can win, because they can charge hefty fees that you as the landlord will end up paying if you lose in court. The tenants do not need to spend a dime to sue you, which is contrary to the advice many of the other posters are giving you. 

So the real risk isn't having to return the $2250 deposit. It's having the judge say you were a little heavy handed and you owe the tenants $200 (or whatever amount). And you'll now be paying for the tenants' $10,000 lawyer. 

Here's a great video from an attorney on this very subject. 

2. The tenant must pay the rent, or they can be evicted for non payment. 

There's no reason you can't evict a month to month tenant. In this scenario, it's important to set the tone early and let them you know you are professional and not a pushover. 

Here are a few things to consider:

Did you buy it with cash, or with financing? If you have any type of federally-backed financing (conventional Fannie/Freddie, FHA, VA) or any type of federal funding such as Section VIII, you still have to give 30-days notice to pay or quit per the CARES Act, regardless of what State law says, believe it or not.

You might consider spending a couple hundred bucks for a consultation with your local eviction attorney just to make sure whatever you end up doing aligns with what they will need when it eventually comes time to file for eviction. 

There's nothing worse that filing a 14-day notice (which you mentioned so I assume is the norm in your State), then getting to Day 15 and finding out it was an invalid notice and you have to start the clock over with a new 30-day notice. 

Likewise, do you have a copy of their original lease? Make sure you confirm what it says about notice requirements. Here in Florida, when terminating a month to month tenancy, State law requires notice of "15 days before the beginning of the next rental period", which means the landlord can normally give notice as late as the 15th to be out by the beginning of the next month. However...

1. There's a caveat there of "Unless otherwise stated in a written lease", and I've come across ten-year old expired leased with a 60-day notice requirement. 

2. Many local municipalities have been stepping in and enacting ordnances that require more than the minimum notice required by the state. Some Cities require 21 or 30 days now.

These are worth confirming with your attorney up front. A $250 bill for a legal consult can end up being cheap compared to 6 weeks of lost rent because you posted the wrong notice. 

Definitely. 

As you grow and scale, you'll find it immensely helpful to use the same paint color and sheen on every property. Need touch up paint? Done. Need to paint one room and leave the others alone? Done. 

We even tend to use the same flooring, for the same reasons. 

That's not to say you can't update your "standard materials list" every few years to keep pace with trends or personal tastes. But there's nothing worse than having to paint an entire wall, or an entire room, or an entire house, just because you don't know the paint color. And even the best "color matches" are rarely good enough to be unnoticeable. 

Beyond that, we do usually install decent/durable blinds (otherwise your tenants will end up putting bedsheets, aluminum foil, and all kinds of other creative solutions in your windows, and/or damage things while trying to install and uninstall their own) and window screens. These are even required by some municipalities and programs such as Section VIII.

A bunch of people will probably chime in here and say you don't need your real estate license and it's a waste of time. 

I wholeheartedly disagree. Especially in your situation. You don't know exactly where you'll end up in real estate. 

Having your real estate agent's license opens up dozens of doors and potential revenue streams for you that would not be there otherwise. There's absolutely no reason not to do it. 

I'm less bullish on the extra semester for eligibility to take the broker's exam. Not that it's a bad idea, and on the one hand it could certainly make things' easier later on. 

But you really have no need to be a broker (and no business being one) without a few years of experience under your belt anyway. So you could take it or leave it, and it depends on what you'd be doing otherwise.

Personally, I'd rather take a post graduation summer trip or something and then deal with the broker's license later on. 

Two years sounds like a long time now. It's not. 

Point taken. But here's what many people don't realize: Prepaid Rent and Rent are not the same thing (I'm basing this on Florida law, but presume many states are the same). 

Rent = My income for that month as the landlord. 

Prepaid or Advance Rent = The tenant's money that is not due to me yet as the landlord. These funds must be held in escrow/trust just like a security deposit, and cannot be liquidated or commingled with other funds. So they don't really do me a lot of good as a landlord. They create an accounting hassle, and I have to move them over to current rent each month as they become due.

Would your "buttoned up" lease be deemed valid by a judge if it actually violated state law? That is the underlying question here.

I am not naïve enough to think that most landlords don't just pocket the money and keep their fingers crossed, but an obvious scenario comes to mind that can cause big problems:

The tenant signed a one year lease and paid in advance, but now they are transferring jobs through no fault of their own and need to move after six months, and they want the other six month's rent back.

This is somewhat problematic if I am still holding the funds in escrow as the landlord. We just have to agree upon who gets the money (and that may very well end up involving a courtroom). 

This become very problematic if I already spent the money on a new car!

Everything else aside, why is starting a new lease in April an issue? I understand there are seasonal variations in the real estate and rental markets, but I've always found Spring one of the easiest times to fill vacancies. As a property manager, we have several vacancies each and every month, and we fill them when they are vacant. 

With regards to everything else, just screen them like any other tenant. 

Do they qualify? Yes or No. 

If not, do they have a cosigner and/or can they pay an increased security deposit? Yes or No.

Are you comfortable with them as tenants, given all of the above? Yes or No.

I would advise against taking several months rent in advance (see Advance Rent Dangers), and in this scenario, I'd much rather have a very large deposit (the amount of which may be limited by state and local laws in some areas). 

The security deposit is your buffer. If you're holding the equivalent of three month's rent as a deposit, and they miss paying one month's rent, then you have two months to evict them before you start digging into your own pockets. The more security, the better. 

In some cases, after a tenant in this situation establishes a good payment history (6 months on-time payments for example), we'd even consider giving them part of their large deposit back by applying it to rent. 

The fact that they want eight months and then month-to-month because they're thinking about buying a house is a non-issue for me. More often than not, the people who say this end up staying for a year or two, or more.