All Forum Posts by: Ragnar Lothbrok

@Bjorn Ahlblad thank you for your advice and your kind words.

I messed up. First rental and first tenants, I screened for 3X income to monthly rent, above 600 credit score, passed criminal history, no evictions, landlord references, proof of income etc. etc.

The only issue is, THIS DID NOT WORK. I just paid cash for keys to a tenant that took "liberties" with the property costing me hundreds of dollars in damage. That along with a series of pretentious trashy insults leaves me picking up their mess and trying to find a new renter in the Fall with no luck yet. This is entirely my fault and I deserve to deal with this for naive screening practices and piss poor management. The only question is, what EXACTLY am I supposed to do now to fix this from ever happening again.

Question for you all, what extra steps, additional to the basic screening mentioned above, do you employ to ensure you get good tenants? Would they be questions like "has a landlord ever treated you unfairly, if so please describe" or something to that effect? Of course there is the legal constraints as well.

Thanks.

@Wayne Brooks

That makes sense, thank you for your input. You're probably right.

@Wayne Brooks you don't seem to understand, 15 year mortgages magically have a lower interest rate than 30 year mortgages. That means two payments for the exact amount would pay down more principle in a 15 year mortgage than it would for a 30 year mortgage. I would encourage you to read the original post, some of the other comments, and wait for it... do your research to become better informed.

After doing some calculations, I realize it behooves me to pay at an accelerated amount of the mortgage up front.

Obviously, as mortgages go, the lender has you paying mostly interest up front and principle years down the road. With a loan for ~$39,000 we are paying ~$170 more than what the bank is asking, to accelerate the loan pay down and minimize the interest needed to be paid. The rental's cashflow allows for this and as I am still happily working my dayjob, I can afford to 'play the long game' and defer cashflow into my personal bank account until years down the road.

My question for all you wise and experienced investors (and vendors) out there:

Would it be profitable to refinance under new 15 year mortgage? Given the already accelerated payments, and the current interest rate of 5.25%, I am wondering if I should just refinance and make the same monthly payment but with less of that payment being interest. Would a bank want to take their time to do this with such a low loan amount?

Thanks :)

@Nicole Heasley

What if you have all the Tennant's information up to and including soc. number? I thought you could you garnish wages and tax returns. The issue I'm referring to is not lack of rent, but rather reckless disregard of the lease.

Thanks

@Jeff Willis

Thanks for taking the time to respond. I'm not sure if your questions we're rhetorical, or you were trying to make a point in lieu of discussion but here are my answers.

To answer the first question asked: a 7-day notice to cure will do what? They ignore it and then what?

The 7-day notice, if able to be issued, would be issued as a ultimatum, either pay the fine and be held accountable for the provisions of the lease, or leave. It would only be intended for problem tenants who are REALLY causing trouble. After they ignore it, which is likely, the next step in the eviction process would start. This process is all laid out in "A Practical Guide for Tenants and Landlords" written by Michigan Legislature (which is my state), since you were asking.

Further, I did not believe or intend on a tenant moving out when served a notice to quit. My rose colored glasses stopped working. That is the reason I submitted this question in the first place. The goal is to try to minimize the amount of time remaining for tenants in the house for which, eviction is inevitable, lessening the cost of lost rent and opportunity for then to commit damages.

I'm looking for concrete laws and regulations to make decisions by. Do you know where is the state code (of course michigan may be different), it regulates for what a tenant can fine/penalized for? My understanding was the lease is treated as a contract, so if the tenant reads it, understands, and signs, they are held to whatever the lease says.

I hope I didn't offend you by stating "cash for keys is a joke", to me it is. If the tenant can come in to your house, recklessly disregard the terms of the lease, and walk away with 10k in cash, its mildly infuriating and I'm sorry if you've had to do that. As stated in the first paragraph of my original post, I understand the utility if cash for keys, but I am looking for a better way.

Thanks again, and good luck to you.

Cash for keys is a joke. I understand the utility in it, avoiding the long process of eviction and hassle is preferable. But, this policy basically establishes your lease agreement as unenforceable.

If your tenant decides to move in 4 friends and a horse? Ah, no problem, here's your money back, have a good day. Smoking inside, turn the lawn into a rainforest, and making "alterations" to the house? Please, let me pay you to leave.

With this status quo, I almost don't blame some tenants for not following the rules. They're just suggestions that are profitable to disregard.

I was wondering what other landlords think about the following:

Structuring the lease to include fines for violations with systematic notices and payment deadlines instead of threats of termination. As such, I believe if the agreed fee payment deadline is missed, a landlord could then file a 7-day notice to cure rather than a 30-day notice to quit. I believe with a 30 day notice, one can almost garuntee their house is trashed and next month's rent lost. Further, garnishments take a year or longer to obtain, if the former tenant is collectable at all.

Please tell me your thoughts.

@Mel Hignell How did you come across this video? Just curious

@Patti Robertson

That is very helpful, thank you so much!