All Forum Posts by: Keith N.

Do you have another meetup planned in the future? I just saw this one from September, and would love to connect with other investors in the area.

@John Underwood

I like your idea about requiring text instead of phone calls.  I've found that many of my tenants prefer to text anyway, and it provides a written history of the conversation. 

Your point about starting the eviction process right away is something I do as well.  When they're moving in, I tell them that if they're late, I'm going to start the eviction process.  I tell them "If you get a 5-day notice, that doesn't mean I want you to move out. I want you to pay your rent."

If they call or message ahead of time and tell me that rent will be late and they have a plan to get it paid and get ahead, I'm very lenient.  If they don't call ahead, or if they don't know how they're going to get caught up, I start with the eviction proceedings and (in the case they can't get caught up) I offer to let them break their lease, move out, and make monthly payments to catch up on the back rent.  Their agreement has strict terms, late fees, and a provision that they may end up in court if they fail to honor their agreement. I would rather have a paying tenant in there as soon as possible, and give the past tenant a path to pay their debt.

Thanks for the good ideas, everyone.  Keep them coming!

@Account Closed, I like your idea of painted wood strips above the windows and for shower rods, etc.  I'm going to add those to my list for turnover upgrades!

I didn't think about it, but I also put plywood in the bottom of my cabinets and vanities on rehabs.  I'm glad you mentioned it!

I've owned rental property for over a decade, and have learned some tips and tricks from experience, forums, books, and friends.  I no longer manage my own properties.  I've hired a property management company, and just review their reports every month. I figured I would share some of the lessons I've learned here, and see what kind of "tricks" or "hacks" other people want to share.

• Tenants pay their rent at the bank - they can deposit it 24 hrs a day in person, either at the teller or through the night depository, or they can mail it to the bank.  This isn't available at every bank, but I made it one of my qualifying questions when I was shopping for a bank years ago.  
  • If I'm out of town, the rent is still deposited. 
  • Tenants don't ask me to come get it because they don't have stamps, or tell me they stopped by and put it in my mailbox.
  • I can see when they paid their rent, and can use my bank statements as legal proof if needed.
• I have a google number that I give to tenants
  • It rings to my cellphone, so I get the call wherever I am
  • It's free
  • I can set it up to go straight to voicemail during non-business hours
• I schedule inspections every 9 months
  • I see the condition of the property every year
  • Each year, I'm viewing it in a different season
• Every property is within a short drive (5-10 minutes for me) - when I started buying properties, I wanted to learn my market well before expanding.
  
  • When I was managing my own properties, I didn't want a long drive to deter me from responding to a maintenance call.
  • I drive by every property at least once a month to see the condition from the outside.
  • I really know the market rents, the neighbors, building codes and laws without a lot of effort.
• I automate whenever possible.
  • When I managed my own properties, I setup google forms so tenant information was pulled from their application into the lease, it asked me a few questions, and I could print the lease with the tenant information filled in instead of filling in blanks by hand.
  • I can forward the google phone number to my handman when I go on vacation.
  • Quickbooks pulled the information from my bank so I was just verifying rent income and expenses, rather than having to manually enter it.
  • I have accounts setup at the hardware store and other supply vendors, and have them send copies of receipts with their monthly statements. No more lost receipts!
• I read every word of the lease to the tenant when we're signing the lease, and walk them through and show them the smoke detectors, water shutoffs, breaker panel, gas valves, window locks, how to use the washer and dryer, how to clean a lint trap, etc.
  • They can't say "I didn't know that was in the lease" - I read it to them!
  • I think that showing them these things helps them to better take care of the property, and helps to reduce potential damage if a pipe breaks
• I schedule showings 15 minutes apart
  • I waste less time driving to and from the property, and between applicants
  • They see other applicants arriving or leaving, so they know there are others interested
• I ask them to call to confirm at a specific time a few hours before their appointment
  • I don't have as many no-shows (believe it or not, there are still no-shows even when they called 1/2 hour earlier to confirm)
• I print our standards on the application (600 min credit score, 3x rent as income, no smokers, we do background checks, etc)
  • Allows applicants to decide if they want to weed themselves out
• I encourage applicants to take the application home to fill it out
  • I offer to pick it up at their home so I can see how they live
  • It requires them to follow up and return it if they're interested, so I don't have to screen through people who apply everywhere with the shotgun approach
  • If they insist on filling it out on the spot, I call to confirm a fact from their application before further screening to make sure they're still interested
• When they turn in their application, I tell them I'll be conducting background checks and ask if they have any surprises I'll hear about that they want to discuss.
  • They've often told me about things that didn't appear on the report
  • They've asked for the application back, said they wouldn't qualify if I'm going to do a background check
• All of my units have pass-through knobs and deadbolts
  • The tenant has to actively lock the door behind them
  • They can't lock themselves out by pulling the door shut behind themselves
• All of my units have been changed over to a master key system
  
  • I have one key that unlocks every door that I own, including padlocks
  • Instead of replacing the whole deadbolt, I can swap out the core in 30 seconds
  • No more softball of keys
  • I have a lock core in a different color that I can put on vacant units that are being worked on so I can give contractors a key
• I have a standard set of 4 colors that I paint every unit
  • It makes it feel more like home if the walls aren't stark white
  • It doesn't cost anything extra to paint rooms different colors
  • They're all earth tone colors that go with any furniture
  • When tenants ask if they can paint their unit, I tell them yes, but here are my standard colors
• I've eliminated carpet - I use tile, snap-together vinyl laminate, concrete, hardwood (if it's existing) or linoleum (rarely)
  • Tenant can bring their own throw rugs if they want
  • Reduces allergens
  • Easier to clean
  • I don't use the old snap-together pressboard laminate that would curl up with moisture
• I pay contractors as soon as I receive an invoice and I know the work is done to my satisfaction
  • Contractors don't want to chase down customers any more than we want to chase down tenants
  • I get a quick response in an emergency because they know I'm going to pay right away
• I never say "no" - I always give them an option of how to get it done
  • Pets are okay, but there's a monthly fee
  • If a pet is sneaked in, there's a fine plus the monthly fee
  • If a pet is deemed dangerous to the property or neighbors, they can get rid of the pet or move out
  • If you're caught smoking, there's a large cleanup fee
  • If they want to paint, I let them choose from my colors
  • If they're going to be late, the late fees are clearly defined
  • If they want to move in another roommate, that person has to apply and be qualified
  • If they want to move because they need more space, they can move into one of my larger units without breaking the lease
  • If they don't mow the lawn or clear the snow, we can arrange to have a service take care of it at an additional charge

I'm sure there are other things I've added to my toolbox over the years, but this is a good list to start.  I'd be interested to hear other ways people have found to make life easier for ourselves and our tenants.  What are some of your best tricks?

A tenant called to complain that the dryer wasn't working, and could I replace it?  When I went to check it out, I found a dense blanket of lint in the trap.

Me: When was the last time you emptied your lint trap?

Him: What's a lint trap? My mom always did my laundry

Another tenant complained that the heat wasn't working, so I went over to check it out.  They'd removed the thermostat batteries for their remote control.

On that same visit, there's a cat, litter box, cat toys everywhere.  They didn't have a cat in the lease.

Me: I'm sorry, sneaking in a cat is a violation of your lease.  You have 30 days to move out.

Her: No, it's okay! I'm just watching him for a friend of mine.

Me: You aren't allowed to have any animals, per your lease. That includes watching them for a friend.

Her: That's not fair! The least says I can't have a cat, but it's not my cat, so it shouldn't count!

Another tenant called around 8pm to ask if I could replace their window right away that night.  He'd lost his keys the night before, so he broke the window and climbed in. The apartment was cold all day and he was worried he wouldn't be able to sleep that night.  This was in January in Illinois.  I boarded up the window that night, then had the glass replaced and gave him the $95 invoice.  He asked if he could get a pass on paying the bill since this was his first time.  I told him it's only $10 to have the door unlocked if he's locked out (I live down the street).

My stories...

A few years ago, the phone rings at 11:30pm from a tenant that has always been pampered by mommy, and frequently calls with inane questions.  Of course, I let it go to voicemail, I'll call her back tomorrow.  The phone immediately rings again from the same number, so I answer it, thinking it might be an emergency.

Me: Hello, is everything okay?

Her: Is it okay for me to put christmas lights on the porch railing?

Me: (smacking my head) Yeah, that's fine, but this isn't an emergency. Why are you calling so late? Why didn't you wait until tomorrow, or leave a voicemail?

Her: Oh, I was just wondering if it was okay.  I'll see if my mom will get me some lights.

If it wasn't for the fact that her mom pays her rent on time, every month.... haha

Another tenant would always pay late, tried adding a bedroom in a damp, unfinished basement (painted the walls, added a ceiling fan, ran outlets with Romex), and got mad when I told him it was against code, then tore it all out and told him it violated his lease. He smoked in the house, and tried moving in buddies without adding them to the lease. He finally moved out without paying the last month's rent because his friend's mom was going to let him rent a vacant house they'd inherited.  I was ready to kick him out, so I was happy to see him leave. 

About 6 months later, he called me up and asked if his old house was still available because his new landlord (his buddy's mom) "just didn't understand him."  I politely told him "no, there are new people living there, they moved in about 6 months ago, just after you left without paying." Then I hung up the phone and laughed to myself for a long time, glad I'd dodged that bullet.

Did you make it clear that you intend to meet your obligations and pay rent through the end of the lease term if he doesn't find a suitable tenant before then?  The only reason I could see for his reply is that he's worried that you intend to break the lease and he'll be without rental income if he doesn't find someone by then.  Every landlord I know loves getting as much notice as possible that a tenant will be leaving.

Good luck with it!

My top mistakes, after 14 years, in no particular order:

• Hiring friends to do work on the property.  
  • If everything works out,
    •  it's a great feeling to help a friend who needs work 
    • they usually give you a better price
    • you can work alongside them to learn and save money.  
  • When things don't work out, 
    • it takes a lot longer to get the work done (costing you lost income)
    • they don't show up on time or for a few days because "you're a friend, and you'll understand right?"
    • they may not have insurance if they get hurt (luckily, I didn't get bitten by this before I stopped using friends)
    • it's harder to go back and demand re-work if you find problems with their workmanship later
  • Overall, hiring friends to help you do rehab feels like you're saving money but it can end up costing you a lot more.
• Not screening properly (mentioned by others)
  • Finding out too late about domestic abuse/ sex offender/ violent crimes
  • Failing to call all the references.  I've had two occasions where the reference they listed told me not to rent to them because they were violent, late payers, or too needy.
  • Not doing a criminal, credit, background check, which might have revealed criminal or credit problems
• Being slow to evict (mentioned by others)
  • Believing their sob stories
  • Accepting partial payments
  • Failing to document every conversation or interaction
• Not walking through the property to make sure they're taking care of it (I now walk through every 9 months so I can see problems in different seasons)
  • We've found crack pipes and other paraphernalia after they moved out
  • We've discovered piles and piles of trash (some bagged, some not) in closets, basements, sheds when trash cans and pickup service are included in their rent - all they had to do was carry it out, at no cost to them
  • We've Found smokers, pets, extra people

Overall, I've had great success as a property investor.  Most of my tenants have paid on time, taken care of the property, and been respectful.  When people ask me what I think of being a landlord, I tell them it's one of the best decisions I've ever made, and I wish I owned more (I'm currently at 25 units).  Biggerpockets is a great resource to learn from other's experiences!

Just a follow-up to this thread, these tenants decided to move a few months later.  Here's what I've found since then:

During the move-out inspection, I found that they had re-installed the basement wiring after my electrician removed it. I had to have it removed again and billed them for it.

During the inspection, there were missing screens, which I billed them for.  When the next tenants moved out (they bought a house), I found these screens in the crawl space, torn. I don't know if they realized repairing torn screens would be cheaper than replacing missing screens.

Their new landlord has informed me that they're behind rent on her house and have made changes that she's worried about but hasn't confronted them on.

During the move-out inspection of the next tenant, several things were pointed out as "that's the way it was when we moved in", such as a broken countertop corner, broken cabinet hinges, holes in walls behind doors and conveniently placed posters that were left from tenant to tenant, and poorly repaired damaged window sashes.

What I've learned from this experience:

I now have an inspection form that I follow so I can be more thorough.  I'm looking into inspection apps to replace my paper system.  If I had this system in place back then, I could have charged the damages to the tenants.  I had been told to systematize my inspections, but kept putting it off.

When a tenant disregards the lease, warn them once.  When they disregard it again, consider ending their tenancy.  People make mistakes, but repeated disregard shows lack of respect.

Make it clear to new tenants that if something seems wrong, damaged, or questionable, we want to know about it.  The second tenants that just moved out kept saying "we thought you knew and didn't want to criticize your work."

Conduct bi-annual inspections for problems or damages that the tenants might not report.  A problem or damage that's obvious to you or I might not be obvious to them. For example, an outlet coverplate had a corner broken off (Their son could have stuck something in and touched wires).  A data rework box (coax and phone) had a broken tab in the wall and was loose (their son could pull the box out of the wall).  A very old doorknob had a missing screw, so the knob would come off sometimes (in an emergency, this could delay exit). The vanity was missing the stopper (easier to drop something in there and clog it). The tenants saw these as "it's an old house" or "it's a rental", not as safety issues.

Sorry for the long-winded post.  I just wanted to share what I've learned from this experience so others might avoid mistakes that I've made.

@Brian Eastman, it was good speaking with you today.  I appreciate your information and guidance!