All Forum Posts by: Penny Clark

@Bryce Wong, I would check with your state to see if there is an state based apartment association that has a membership available to private rental owners. For example, the California Apartment Association has an education arm called Sacramento Valley Rental Housing Association.  Upon paying their membership fee, you have access to all the professional forms used by the CAA. The Association also offers classes for private rental owners in property management as well as seminars to keep up on current issues for rental housing. In my view, going local is always better because these associations know what is happening statewide and locally with rental housing (pending legislation, new housing laws, etc.), the courts recognize their forms as professional communication and these associations have already had their legal team go over them to make sure they are compliant with Fair Housing laws. However, if your state doesn't have a professional housing association such as the CAA, then try your local real estate association. If the NAA is all you got, that's at least better than downloading something from the internet that may prove to be outdated or non-compliant with the laws in your state.

Good luck!

@Mitchell Standing, my nephew is doing just this with a condo in Arizona. It depends on how well you screen your tenants. As long as you treat it as a business relationship, it can work.

I would tell her when you receive the rent, she can move in and offer to prorate it for her the second month. These situations are the main reason I advocate for a month to month agreement with new tenants, because new tenants are like a box of chocolates - you never know what you're gonna get!

Good luck!

@Terry Brennan, Sounds to me like this is a reoccurring pattern with nearly new tenants. Check the laws in your state and County and issue a three day notice to pay or quit (if that is your law) immediately. No more Mr. Nice guy Landlord.

If this had been a tenant with a solid payment record for two years or more and was suddenly hit by hard times, well, then I'd go with Russel's first suggestion. The last thing you want to do is rock the boat with a good paying tenant. However, it appears that either your tenants have taken advantage of your late payment acceptance generosity or they weren't qualified income wise to pay your rental rate. 

Either train up these tenants quickly or don't renew their lease and get someone in there that can 1) afford your rent and 2) pay it on time. When you screen your next tenant shoot for at least 3 times income to rent, check income to debt ratio and do a thorough previous landlord check asking the following questions:

1) Were your tenants ever late with rent payments and what were the dates?

2) Were your tenants ever issued any 3 day notices to pay or quit or cure or quit and what were the reasons?

Good luck!

@Clementene Taylor, I would pursue the duplex idea: Purchase one in a decent area, live in one side and rent out the other. Doing so will give you the best financing terms and it will provide good experience and an education in learning how to be a landlord.

Good luck!

I meant to say, your personal residence and you are renting out a room.

@Nick Sexton, Congrats on your first rental property! If it were me, I would start by checking the laws in your state from a government resource (I've included a link with this post)  before you start eliminating people based on familiar status. I think Amber is correct in that if it is your personal residence, you can decide who you rent to and would not be held to Fair Housing standards. However, if it is a separate residence, it changes. When you go to the link on Minnesota tenant-landlord rights, go to resources and statutes and check out statute 363A.09. 

You are wise for doing your research regarding rental criteria and having this set up prior to selecting a tenant. Mark offers some good suggestions to get you started. I would put some of your criteria in the ad so it helps to screen out tenants who won't qualify. Also hand it out with your applications. Do this for anyone who applies. It would be prudent to take a Fair Housing class and become familiar with those laws. Check your local professional housing association to find one near you. 

You may want to rethink hiring a property manager early in the game because it will cost you 10 percent every month and it will provide an incentive for you to learn your rights as a landlord and understand your tenants' rights better than they do (Doing so will prove invaluable to you if you should ever end up in court). If you screen your tenant well and set clear ground rules from the start (when to contact you regarding maintenance repairs, how to pay the rent, etc.) and enforce them when needed your first experience should go fine. 

Good luck and be sure to use all the resources available to you here!

http://www.ag.state.mn.us/Consumer/Handbooks/LT/default.asp

@Wade Garrett, look up the laws in your state to find proper notice to issue tenant for nonpayment of rent. If these tenants were timely in paying rent with friends former owner, it should be enough of a warning to get them to pay up. I don't give any tenants leeway unless they 1) Have a well established payment record with ME, at least a year) and 2) Their reason being late can be documented and is beyond their personal control (payroll change over of companies, personal robbery, medical emergency of the tenant not a family member that leaves them incapacitated). Even then, you have to be strict, otherwise, tenants will take advantage. 

Good luck! 

@Adrienne Bryson, Those comments made by Roy are spot on about how many rental owners do not run their properties like a business. As a property manager, I have seen many instances of this - outdated leases downloaded from the internet, disorganized payment records from tenants, etc. When they come to us, many times it is out of desperation. They may have lucked in with a couple good tenants at the start, however, their business rapidly deteriorates with one bad tenancy or worse, a devious tenant who knows how to use the landlord-tenant laws to their advantage. For this reason, I am a huge advocate of Bigger Pockets and share the website with many of my clients.

I think if you want to jump into a purchasing a rental and can swing the larger payment, a larger multi-unit may be a better choice. However, if it seems overwhelming to go to that level and you want to stay under 5 units, ask for these items from the seller before you buy:

- copy of tenant leases/agreements, their recent contact information, and payment records if you are inheriting tenants with the sale

- copies of the last six months of utility bills

- copy of CLUE report (insurance underwriter report shows if any claims have been made on property for last seven years)

- list of capital improvements made (if any)

Good luck!

We started giving out $100 gift card to nearby grocery store as a way to say thank you to our awesome tenants. I'm glad to see some other landlords are doing this.