All Forum Posts by: Penny Clark

@Adrian Smude, Wow, a lot of scrooges here! If your tenants consistently pay on time every time year after year and take care of your property and don't make the neighbors mad, a box of candy,  or a $25 gift certificate from local grocery store is just good customer service. Some apartment corporations choose to do this as part of their tenancy retention budget - especially if their lease renewal date is coming up soon. However, if you think giving a token gift is too personal, why not opt to provide something that will benefit your property such as a free carpet cleaning after the first of the year or a yard clean up. Your tenants would appreciate that too!

@Account Closed, Once a tenant gives  a 30 day notice, the landlord should inform the tenant of the right to a have a pre-move out inspection appointment, which can be up to 14 days before day of move out. Tenants can choose to decline it. The pre-moveout inspection is an opportunity for the landlord to list any items (beyond normal wear and tear, ie holes in the wall, stained carpeting, broken blinds, missing or cracked switch plate covers, etc.) that must be repaired or cleaned prior to move out. A landlord can choose to meet with the tenant for the final move out inspection, but most landlords and property managers prefer to do the final move out check on their own. For this reason, I recommend tenants not only take pictures of the property before they move in but also after they move out. 

Most disputes between tenants and landlords occur due to disagreements with deposit returns. Even if the landlord started the repairs, it is landlord's responsibility to document and provide copies of receipts, invoices of work done to restore unit to pre-move in status. If you disagree with the landlord's return amount, you can take it to small claims court. In California, the landlord needs to return your deposit minus expenses within 21 days.

I would recommend any future relationships you have with a landlord be formal and any communication regarding repair requests, lease terms/agreements,  etc be in writing. You can find out more about your tenant rights by looking up tenant/landlord rights with the California Department of Consumer Affairs.

Good luck!

@Jennifer Jackson, I wholeheartedly agree with your decision to increase the security deposit and verify income is at least 3 times the rent. To qualify "higher risk " tenants, we would ask for a double deposit, income needed to be 3-4 times the gross rent and the tenant had to show a verifiable good rental history for the past 4 years. Doing a month to month agreement rather than a lease provides you further protection, in case things go south and you have to get the tenant out quickly.

Good luck!

@Jonathan Taylor, Even if Prop 10 doesn't pass, consider it a wake up call for owners to get their current rents up to market rate AND do necessary repairs so those rent increases are justified. If you are under contract and there are tenants in place, see if your realtor can get them to sign a new lease with new rent (recommended increase no more than 10 percent) and terms prior to closing the deal. If you are near closing escrow the seller should have already provided you with copies of leases, tenant ledgers, and contact information. 

In Sacramento, our City Council is working on establishing a rental advisory board who will set the rent increase limit, and decide what terms are grounds for evicting a tenant, etc. I've been advising all my owners who own rental property within City limits to raise rents now and do needed repairs to justify those rental increases. Rental owners in County should do the same because anything the City imposes, the County is likely to follow.   

@Juan Alvarez Realtors and the sellers they represent want to see a pre-approval letter for an approved loan amount based on credit score and income verification.  This assures the agent and seller you have the ability to secure financing whereas a pre-qualifying letter "qualifies" you if you have employment and a stated credit score. Granted, I'm not a loan agent but have gone through the process several times for refinancing or financing a property to know what you should have ready for your agent and their loan officer:

- credit report (Experian, TransUnion, Equifax); banks will usually run their own, so Credit Karma does not count. You can get a free copy from all three bureaus at annualcreditreport.org  If you have a security freeze on your credit report (now free to everyone), you'll want to lift it temporarily prior to having your lender run it.

- income verification: Two most recent months of paystubs if you have W-2 employment or 2 years most recent tax records if you own your own business. You'll also want to have the two most recent bank statements of all accounts. Providing a summary of amounts in retirement accounts, 401 K s can show you have resources to draw on in addition to employment income. If you own rentals, you'll want to provide copies of leases, tenant ledger if you are using rental income to qualify for the loan. You may also have to meet an experience requirement managing your rental to qualify for certain loans.

Assembling these items in an easy to read financial portfolio for your lender can make a good impression and help keep you organized 

I hope this information was useful and good luck on getting your loan! 

@electricangel, As a landlord, you still have a say as to the manner in which those repairs should be done - such as hiring a licensed contractor to clean carpets, patch a hole, etc. However, I would leave very little up to tenant other than general cleaning and filling in nail holes. Most tenants dont have the skills or means to do certain repairs and you may end up correcting their mistakes. Use the security deposit and if the funds dont cover it all get the rest from attaching wages via small claims court. Remember to include copy of receipts and photos of damaged areas for all items charged against their deposit.

Good luck!

Hi johann,

Providing free laundry room facilities is a great perk if you cannot house machines in the individual units, so I hope you are building this cost into the rents.

Lots of good suggestions here including posting of common courtesy rules such as cleaning lint trap after each use, not leaving clothes sit in washer or dryer, and locking door before leaving the facility. I would also suggest posting copy of operation manual and troubleshooting tips that may prevent unnecessary calls as well as including a number to call if there is a maintenance emergency. A security camera is a good idea if residents have safety concerns of outsiders getting unauthorized access. I would present it in this way to allay concerns residents may have concerning privacy.

Hi Roxie, Congratulations on your investment! I can only add that C/D properties can be difficult and costly if there is a lack of prescreening, regular oversight, or capital reserves. Have a plan in place before you need one.

First, practice good tenant prescreening. People who rent in these neighborhoods dont have reserves, dont budget and live paycheck to paycheck. Dont just look at their credit score or report for late pays, repos, or other obvious red flags. Look at their debt to income ratio and how much money will be going out to pay other bills aside from your rent payment. I would also request two months worth of bank statements to see if they have a cash cushion to absorb an unexpected car repair or other financial emergency. Bottom line is do not accept any applicant who makes less than 3 times the rent payment. Even if they insist they can meet the rent, go by the numbers.

Second, make sure you or your property manager does regular site visits. Good tenants will often alert property management or owners if there are excessive noise disturbances or items in disrepair. However, nothing takes the place of conducting  bi-annual inspections of the interior of the units and bi-weekly site visits to check for any external maintenance issues. Be responsive to inspecting and addressing service requests in a timely manner and enforcing terms of the lease agreements. Tenants- even good ones- WILL push those limits because people want control over their environment. By following lease terms you reduce the risk of unknowingly violating city or county codes, extending favoritism to one tenant over another and you preserve the integrity of your investment.

Third, no matter how well you screen your tenants or monitor your property, life happens. Medical illness and  job loss can turn a good tenancy into an eviction. Lease breaks can occur leading to unexpected vacancy costs that the deposit wont cover. For this reason, have a fund set aside to absorb these costs that can not only eat up profits but can put your investment in financial jeopardy. 

You may not  be able to prevent all losses but youll better your odds of success by following a plan.

Best of luck to you!

@kyle burrows, yes you can allow the cat with an additional deposit (for a cat I would require a deposit of no less than $750) or issue a 3 Day Cure or  Quit for them to get rid of the cat. The more important issue here however is they ignored the terms of the lease on this matter and they may take the opportunity to push the boundaries on other terms if you give in. I agree with the others who said you need to set a precedent so other terms will not be violated. 

Good luck on your decision.

@Jesus Moreno, If it were me, I would build the cost of the electricity into the rent. Unless your tenants are growing a pot farm inside, you can figure an average use on the high side from past bills. If you put the tenants on a month to month agreement, you can institute rent raises ( or any other change in terms) in a timely manner. 

Good luck in your endeavor!