All Forum Posts by: Karen F.

Yup.  I'll tell you the one piece of advice we were given, and didn't follow, and had to learn the hard way.  No matter what the story that the tenant gives you, begin the eviction according to your state's laws the instant that the rent is not paid in full by the end of your state's grace period.  Learn eviction law for your state and follow it.  If you're not up to doing that, find the best landlord-tenant lawyer who handles evictions in your area and use them.  We're at the point where after ten years of renting out grade C apartments in a low rent town,  we know more about eviction law in our state than most lawyers do.

The corollary is to screen well, but if you're dealing with low end rentals, anyone willing to live there will have bad credit, so what you're really screening for is past evictions, lawsuits, nuisance suits by the tenant, court judgements, and criminal behavior.  Screen them again the day before move in - sometimes the eviction they're fleeing doesn't show up until after they've moved into your place.  Once we had a woman who was simultaneously being evicted from THREE units - two while she was moving into ours, and then ours.  But they didn't show up in the court records until AFTER she had moved into our place!

A current landlord might not tell you the truth about a bad tenant, because they want them to leave.  I admit that I have been guilty of this myself, when a dangerous and mentally ill tenant who was making our lives miserable got Section 8 and needed to move out.  Likewise, they might not tell you the truth about a good tenant, in the hopes of keeping them from being able to move.

Don't let a tenant threaten you, cajole you, manipulate you.  Make sure you are scrupulously honest and follow the law, and the tenant will never have anything to hold over your head.  We recently had a tenant threaten to call in the housing inspector.  I replied to her, in writing, to feel free to do so, because we had an excellent relationship with the housing inspector's office, and considered them our partners in helping us to provide safe, up to code housing in that town.  Needless to say, that was the last we ever heard from her about that threat!

Make sure you're making money off of landlording, because it's a pain in the you know what, so if you're not making a lot off of it, it's SO not worth doing it!

Interesting point, about the "let the tenants pay the mortgage, so that I build equity" principle.  I agree, but it is very feasible  to do this with strongly positive cash flow, too, and be making money as you let the tenants pay off the mortgage.  Better yet, if you can buy something that needs some work that is close by, so you can do it cheaply - then you have made your money up front, before even considering cash flow and letting the tenant pay off your mortgage.

What are the property taxes?  Is the area so horrible that you can't get landlord insurance in it?  Are you providing utilities?

In general, Sec 8 pays mid to high market, but the tenants destroy the properties plus you have to pass an annual re-inspection, so you pay a lot of maintenance.  For example, the tenants we had in a unit would simply bust out the screens so that they could throw stuff out the windows.  So my hubby put in the screens the day of inspection, and removed them immediately afterwards, rather than replace them annually.  Plan on getting to know a cheap used appliance store well, because you'll be using them to replace busted stoves, when the kids jump on the open oven door.  Stuff like that.

If this place were very close to you, and you could manage it yourself, and factoring in the taxes, insurance, and added maintenance costs, you get a ten percent return on investment, it might be a good idea.

I just do not get this "cash flow" model of "investing".  The issue is NOT cash flow!  It's return on investment.  For example, I put a large amount of money into a property, say 2 million.  It produces a positive cash flow of $100/month.  Woohoo!!! I have positive cash flow!  But my return on investment is $1200/yr on 2 million dollars.  This is less than 0.01% return on investment.  This is the worst investment ever.

Or, I buy a property with that 2 million dollars that has positive cash flow of $200,000/yr, or a ten percent return on investment/yr.  Not bad.

You can never be sure whether the value of a property is going to increase or not.  So you're best off choosing properties with the best return on investment possible, in markets that you hope are going to increase in price (and rent).  That way, even if the market doesn't increase, and rents don't go up, you still are making money.

I'm assuming you will occupy a unit.  Take some classes at home depot or Loews on basic home maintenance, like fixing toilets and faucets and outlets and such, to save money on repairs.  Read every thread on the pitfalls of investment real estate on this site.  Join a local real estate investors' meetup group in your area.

It's an excellent move on your part.  Done right, it's the first step towards building wealth.

We have it in the lease, but are too lazy to enforce it.  Recently, a tenant who was (unbeknownst to us) running an unlicensed auto repair business out of the driveway of the multifamily he was in, had a car he was working on catch fire in the driveway right next to the house.  Fortunately, the fire department arrived quickly, and put it out.  The only damage was to the siding and a couple of windows.  We could have gotten our insurance to cover it, to reside the entire house, but we knew our premiums would skyrocket.  Of course tenant hadn't obtained renters' insurance.  We wound up residing that wall of the house on our own.

Could have been a lot worse.  We really should enforce it.

One of the many reasons that I don't like to own anything where I don't have control over the entire structure. I don't want to deal with an HOA or condo board, their fees, their lack of action, their rules.

Give me a freestanding multifamily or apartment building, I can whip it into shape, and control what goes on in it.

WHAT???? The unit sharing a wall with you is FEEDING the rats???  OMG!  Look, I owned pet rats at one time.  I love rats.  Whenever I see a wild rat (one of my pet rats had the same coloring as wild ones), I go, "Awwwww, ratty!"  And still, the thought of anyone deliberately trying to keep rats around a property is just astonishing.

If I were you, I'd be in that HOA woman's face first thing in the morning. Tell her to get those idiots next door to stop feeding the rats, or you're going to insist that the HOA sue them. Tell her to get an exterminator into BOTH units, immediately, and get a year long contract, to keep the exterminator coming on a regular basis for a year.

Again, you knew you had a problem. You knew you had crazy people who feed rats sharing a wall with you. Until that's taken care of, you've got rats in the building indefinitely. I still say you let them out of the lease. Put it this way, how would YOU have felt had you been in their shoes? You rent a unit in good faith, only to find out that it's rat infested, and that the LL knew it. Give them back their deposit, let them out of the lease, and fix your problem (which means getting the HOA to fix the neighbors).

Here in CT evictions are removed from the online court records after three years.  It's frustrating - I don't care WHAT reason anyone has, there is NO excuse for sitting in a rental without paying rent until you get evicted.  You're going to have to go someplace once you get evicted - why couldn't you just depart for that place before the LL had to evict you?

Of the three basic necessities - food, clothing, and shelter - if you shoplift food, you get arrested.  If you shoplift clothing, you get arrested.  If you steal shelter, you become a person with rights to the stolen property, you get a free legal aid lawyer, the court thinks they're being magnanimous by allowing you to continue to steal shelter for a little longer, and then not only is there no punishment, but the court will actually conceal for you the record of your having stolen shelter!

When you say "previously treated", how long ago was the treatment?  If it was two years ago, and the problem was gone, yeah, it's new, and you should have a chance to fix it.  I'm sure your lease is written that way.  If the treatment was recently, then the problem wasn't gone yet, and you rented them a place that had rats, knowingly, or you should have known.  

They could leave, and sue you in small claims court.  If you file against them in housing court for breaking the lease, their answer (and that's a written public document, usually posted on line and searchable by address) will make public the fact that the unit has rats. Another option they have is to call in the health department and get the place condemned.  That's gonna be harder on you. Rats are not cute.  Most people will not willingly live with them.  YOU would not live with them.  If they notified you of the problem 3 days after moving in, then obviously the unit was rat infested at the time that you rented it to them.

If I were you, I wouldn't have told them to go approach the HOA and get them to take care of it. I would have contacted the HOA immediately, and if they couldn't get someone in by the next business day, I would have paid an exterminator privately to come in by the next business day.

To me it sounds as if you knew there could be a problem with rats there. I think you should return their deposit, keep the first month's rent since they've lived there a month, and let them break the lease. Then get the place professionally exterminated, and keep on having the exterminator come back on a regular frequent basis until the problem is solved. Put pressure on the HOA to get the entire building taken care of, over and over until the problem is gone. Then rent it again.