All Forum Posts by: Kenny Dahill

@Denise Gold, a few ideas to help reduce risk:

• Upfront Rent: Have them pay the first 2-3 months upfront, plus the security deposit.
• Increased Security Deposit:  If they are against upfront rent then consider increasing the security deposit to your area's legal max.
• Proof of income/funds:  Have the co-signer provide their latest 2-3 bank statements to prove they can afford it.
• Roommates: Are there any roommates for this individual or is it a single?
• Background Check: Anyways she doesn't have credit, I would still run the background and credit reports on her.
  Month-to-Month Lease:  Have her accept a shorter term lease that way you can cancel the renewal much earlier in case something happens.  It could be a 1,3, or 6 month lease.
  
  

Hi @Viral Patel, there are standard processing times for any bank-to-bank transactions.  Our users have the same wait period when collecting rent.  You should set your Due Date to the 1st.

There are two sides of each payment: in and out.  To arrive on the 1st, payments are processed a few days before if they set up auto-pay.  Typically 2-3 days.  Banks hold onto your money to make sure everything properly clears from the tenants side.  Whenever you pay for a Quick Payout, you're essentially paying the bank to risk paying out to you before their process is completed.

Since there is a cost associated for that risk, Cozy/Burbz/Tenant Cloud/etc. will charge the landlord a 'Quick Payout' fee to accelerate the transfer.

Inform your tenant if they pay on the 1st then it might not arrive on-time to avoid late fees.  It's the same if you mailed the check out on the 1st.  They will need to plan on paying a few days early to allow for processing.  Then you need to wait a few more days for it to hit your bank account, although it may show as 'pending' once it's been approved on the 'in' side.

@Morgan Porter, I had a similar experience with my college rental.  Although it was 1 tenant and his mother.  They cleaned for 2-3 days straight while the others bailed.

Did I feel bad?  Yes.  But not my problem.  I told them I would be fair on my move-out inspection and if it's in great condition that I would pay it back in full.  They did, so I did.  There's no legal ramification being a bad friend/roommate, but plenty of legal ramifications as a landlord giving preferential treatment.

@Peter Tverdov tip of move out instructions is a great one.  My last move-out was atrocious, 10lbs of raw warm meet in the turned-off freezer in the Arizona summer type of atrocious.  My cleaning lady suggested I give specific cleaning instructions and charge for anything missed.

Hi @Account Closed, here are some thoughts from a non-PM.

Condition of home:  What is the condition of home when tenants moved in?  If it's brand new (or remodeled) then you're going to have living condition punchlist items.  Every time I have a tenant in my completely remodeled single-family units, the first 2 months have a lot of issues that arise.  It's because we only test the sinks 5 mins at a time, not 50 mins.  We don't run the dishwasher fully loaded 2x in a day.  There are many more stresses when somebody lives in the unit.  If the unit is old and outdated then you can expect more to break.

Min. Threshold:  $250 is a low amount for PMs, I'd say the average we've seen on Burbz is typically around $500.  Although you can accomplish a lot of mini-repairs under the $250...

Unlivable Damages:  What's important to consider are the repairs that make the unit unlivable.  HVAC goes out, doors won't lock, plumbing issues: all major repairs.  What you need to avoid is having a handyman go out for every little repair like loose door handles, drywall repair, etc.  Either the tenants are wrecking the place a few months in or the PM firm has to fulfill their handyman's hours.  You can sneak in a lot of unnecessary repairs under that $250 clause.  For those little repairs, consider having a quarterly/semi/annual repair trip for their handyman to address all the tenants little issues.  It'll save time for the handyman and dollars for you.

I won't jump to the conclusion and assume you're the issue.  You're 3-4 months into a new relationship and a healthy Storm/Form/Norm will occur.  You're at Storm phase.  Have a conversation with them in regards to your thoughts and listen to their explanations.  Make the decision if it's reasonable or not.  You have a few options to proceed with:

• Fire Them!:  A lot on BP jump to this suggestion too fast.  Understand all their termination fees before you fire; typically they request all their future-fee's.  If you're going to pay the same amount anyways it won't do much good.  I always advise to make the best attempt to work it out between parties, unless there are ethical or legal issues.
• Set Boundaries:  Now you know more how they operate, work out a plan that can work for both of you.  It might not be ideal but you're paying them, they can also fire you.  Give them a list of scope that they either can or cannot proceed without your permission, regardless of the $250.  Determine a good maintenance schedule to address all the small items.
• Hire New:  If you make the decision to hire new then make sure to keep your relationship in good standing until their agreement expires.  Last thing you want is a PM who knows you're going to fire them in 6-8 months.  Learn lessons from this first PM and find a PM who will accept more of your demands.
• Self Manage:  If you continue to struggle with PM's then consider self-managing.  It's not ideal to be out of state but with technology it is easier than ever to self-manage anywhere.  You can take the maintenance calls and coordinate vendors.  Look for a realtor to help with the leasing.  There are software companies to help for rent collection and tenant screening.  You can find the right balance for you and hopefully increase your profits.
  

 Communication is a key element to any successful business.  Good choice @Drayden Morgan

I will do both: open house and per appointment.  I actually do an open house while the tenants are still living there, especially if they've staged the house great.  Pay the tenants $50-100 for a dinner and ask for 3hrs to show.  My goal is minimizing vacancy and there's no better way to minimize vacancy than showing early.

I have found better luck with open houses, especially when multiple couples are there!  It creates 'realism competition'.  If they like the place, they know to be quick about applying and deciding!

I do bring applications to the open houses.  Just like rent collection: make it easy!  They can fill it out there and hand it to me.  Open houses are  a great time-saver too, plan ahead though and make all email replies indicating the date.

@Skyler Walker, personally I don't allow myself to be put in this position.  

I find it unprofessional and selfish when managers or landlords take multiple applicants money for background checks when they're not the lead candidate.  I'll do my first reviews and whomever I decide is my top candidate I will have them pay the application fee.

It's not uncommon for B/C tenants to submit multiple applications and if they had to do that for $50 each time that hurts them financially.  I prefer to be transparent with them and say we received X number of applicants and will be asking the top candidate to pay for a screening report.  Often they respect you more for that truth.  I don't tell the next candidates anything until I know the status of the lead applicant.

If you're a business person, consider this the lean model.

@Jonathan Trimboli,

If you're going to manage others then you will need to meet your local restrictions for licensing.  States differ from needing nothing to an agent, PM or brokers license.

Although you should check your local laws because some areas the only tasks you need a license for are discussing rates and terms.  All other aspects of property management wouldn't require the license.

When you're ready, there are free landlord software companies such as Burbz, Cozy, Tenant Cloud.  Eventually you'll grow large enough that you might need to convert to software geared for commercial managers that way you can utilize the landlord portals.

If it's simply $5mil worth of assets or cash then that's easy: find a lender who'll allow a 90% LTV on a $5mil asset.

Hi @Drayden Morgan, 

Appears plenty have address your question; you can only take unpaid rent and late fees from security deposit.  However, rather than focusing on the solution to your problem perhaps you should focus on the cause of your problem.

• Change Rent Schedule:  If the tenant is struggling to pay monthly then you need to have a conversation about why they are constantly late.  More importantly, work together to create a rent schedule that allows them to pay rent easier and more on-time.  I suggest you consider semi-monthly or even weekly rent payments.  That'll allow you to know quicker if she's going to be late or not, rather than waiting an entire month.  You'll still be paid the same amount but it could help if she has a lot of end-of-the-month bills and doesn't know how to properly budget.
• Notices:  No matter what, send out the late rent and eviction notices as early as legally possible.  Just because you send out the notice doesn't mean you have to take action upon it, although it gives you the flexibility to.
• Cash for Keys:  If she is struggling with this rent then have a conversation about moving out early.  Promise her you will give a good recommendation as long as she leaves the place in good conditions.  I would even help her find more affordable rentals.  You must honor her lease though, therefore you cannot put any timeline on it.  But it would be a win-win if they find a more affordable place to rent and you can replace with a more reliable tenant.

Best of luck.