All Forum Posts by: Rob B.

I'm inclined to agree with Amanda and Michael on this. You have a situation where the tenant wants to vacate early and yes, at this point your lease should indicate what process to follow as far as early lease termination. Having said that, what kind of tenants are they? Have they been paying their rent on time? Have they done a reasonably good job of keeping the property in tip-top shape? I probably would proceed similarly as Amanda did; just need to make sure that letting this current tenant out early won't put you in a financial bind. @Sarah Huynh

Before answering the question, let me point out that, in some jurisdictions, pre-paid rent must be handled the same way as a security deposit (for example: in Chicago, it must be held in a separate, interest-bearing account). Now, to the question of whether I would allow a tenant to pre-pay that many years of rent. For me, it all comes down to whether the tenant is willing to agree to annual rent increases as part of the agreement. In this case, you've already noted that no, the rent will stay flat. If the tenant is basically exchanging 10 years of pre-payment for flat rent, I would have to think for a while about whether this is a tradeoff that is truly in my favor (to answer that, it isn't). I likely would not allow 10-years of pre-payment in exchange for flat rent. The reason for this is that my units are in an area where 5% annual rent increases are normal and there’s a lot of demand for units. With the 5% compounding, if I’m collecting $500/mo today on this property, 10 years from now what I’d expect to receive is grossly higher than today's current $500 price. Personally, I’d be fine w/ dealing with a bit of turnover in the 10 year period. And as others have noted, if something happens where the tenant is moving out a month or two month's later, that rent more than likely has to be returned. @Spenser Harding

Patricia absolutely has the right idea here. It is so important to make sure that they're covered for a myriad of reasons (ie.make sure that their personal property is covered, along with temporary living expenses - ie. if something happens within the property that forces a tenant to need to stay in a hotel, most renter's insurance policies cover that cost). More so, a roommates' items aren't always covered, so it is best that all roommates have renter's insurance. And not to argue the merits of renters insurance, but to re-emphasize what has been stated above, most leases require it these days. @Randy Wiley

Hi Mark, there are definitely a lot of helpful tools out there and it is a good idea to consider an option which allows you to collect rent much quicker than those others but still provides other rental management tools you might find valuable (again, not to knock Cozy or these other tools like Tellus), but you can easily keep track of who paid what and on which date with a tool that is reliable and processes payments faster. Definitely can help to make the process as painless as possible and more efficient for both parties (landlord + tenant), and also offers digital leases. Again, you may run into transfer limits with some of those other apps which aren't necessarily designed for the purpose of rent collection but the right landlord software can make this seamless for you. Would love to learn about any additional needs; definitely helps to keep landlord solution providers on their toes! @Mark Perea

Hi James, I will say it is great that you're going through the process of rethinking where you want to set that price; and I don't want to knock Craigslist or Facebook for posting your listing because a lot of landlords have luck finding tenants there. I will say, it could be worth considering a shot at an actual software solution built for DIY landlords (1 - 15 units) that helps you to automate your own rental process (ie. compared to other tools, one that helps you to actually build a single listing and syndicates it to 10+ major listing sites, allows you to schedule showings, provides you with super thorough tenant screening options, online digital leases which can be customized and help you by breaking out those fees, automated maintenance tracking, and fast rent collection which also offers your tenants the ability to report their positive on-time payments to the major credit bureaus; just another positive reinforcement/added incentive to get them to make those payments on time). I'm hoping it will rent soon and I think you have the right idea thus far; it is still early enough in the fall (technically still 'late summer') so you have some time. @James Scott

Awesome! Happy to hear that you were able to connect with him on that. Definitely sounds like there are a couple of lease violations at play here; and if they'll bend the rules with the pet policy (ie. noted "two cats" were moving in and now there are two dogs living at the apartment), they're likely to continue to push the edge of the envelope. I hope everything works out! @Jon Penton

@Mark Spidell - since it sounds like you have the 3 duplexes and a 5-unit, there are some great options out there that can make managing your rental process super easy (no need to hire property managers when there are platforms that help to automate the rental process for you by offering the tools to list, screen tenants, create + sign digital leases, collect rent online and manage maintenance requests). Not sure if this is the route you'd prefer to take. This would make the management process easier. Sometimes property managers will charge anywhere from 6 - 10% and there are other more cost-effective ways to get the most out of your rental property. Just a thought. I'll defer to others. Best of luck!

That’s a good question to think about as you’re getting started. I know there are a lot of stigmas attached to renting to individuals who hold Section 8 housing vouchers; it is easier to think through the cons - however, some of the pros might be that you open up the property to a bigger pool of potential applicants. In many instances a large portion of the rent is almost guaranteed to hit your pocket each month - again, this may not cover the full amount but they are consistent payments coming in (paid by the government). Typically the tenants are already prescreened and you’re much more likely to have a lower vacancy rate. However, there’s always a certain level of risk that you take in accepting Section 8 vouchers and for you, you need to decide how you’d like to proceed - I know a portion of the rent is guaranteed, which is great, but I also wonder if the portion that the tenant is responsible for is considered riskier when compared to non-section 8 tenant candidates.

Additionally, there are a lot more regulations that you'll have to abide by as far as the price that you can set the rent at, and I don't believe HUD pays Security Deposits either, as Greg noted. Other downsides to going this route: the process to get the unit approved can be long and tedious; the apartment has to pass section 8 inspection - they are thorough, and go by the book. Section 8 doesn't manage the tenant, so if the tenant isn't paying their portion of the rent it's still your responsibility to evict them. All you can do is report it to Section 8 and there's a possibility they can lose their voucher. I'll defer to others though to keep the pros and cons coming! Still learning about this myself but happy to share what I've learned thus far. @Joe San

Hi Robert, while I can't really speak to the situation going on with Morris Invest, I can speak to your initial question. As the podcast may have mentioned, it is a tool is best suited for small DIY landlords (and their teams) to keep track of things like rent payments + leases, but it also offers several other tools as well (ie. listing the property to 10+ major listing sites; a scheduler to schedule showings at the property with prospective tenants; comprehensive tenant screening options with reports pulled directly from TransUnion; the ability for tenants to boost their credit score up to 40+ points for on-time rent payments with our CreditBoost feature; and maintenance ticket tracking with automated messaging). Again, sounds like you're about to make a big decision (shouldn't be taken lightly). More than happy to answer any questions that you might have about online rent collection options. @Robert Collins

Hi Dylan! Welcome to BP (albeit, you've been a BP member for a few years, but still, welcome!). It is awesome to see you're starting on this so early (best time to start in REI was yesterday)! Sounds like an excellent plan. Once you do decide to procure your first rental, definitely lean on the BiggerPockets community as a resource; I'll also say that it could be worth considering a shot at a software solution built for DIY landlords (1 - 15 units) to bring some automation to the rental management process (just to make things much much easier for you)! Again, best of luck on getting started and more than happy to answer any questions that you might have about online rent collection options. Welcome to the community! @Dylan Whitcher