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Advice on being a first time LANDLORD
 

Does every renter trash the apartments. I guess I will need to save more money in case things happen to my apartments.
My apartments are located within a low-mid middle class income area.

Re: Advice on being a first time LANDLORD
 

Like the title says, I am becoming a first time landlord very soon and help any advice or help you guys can provide. I have read some books on the subject but nothing provides first had knowledge.

Any advice, guys?

Re: Advice on being a first time LANDLORD
 

Congratulations first off.

Key to this is research, and lots of it.

ONE point, this is BUSINESS not personal.

Avoid being suckered into helping a friend, a third cousin.

You want no emotional attachment to the party renting.

Re: Advice on being a first time LANDLORD
 

Speaking from experience.

Background checks, credit checks, call ALL references, make sure references are not family.

Ask about rental history and call those landlords.

What looks good on the outside might not seem so well.

Hate to be nasty about it but a lot of nasty living people out there who do not keep themselves and their home very clean.

If they are a job hopping person most likely they will do the same to you.

The new norm is first and last months rent and a security deposit.

So they will need 3 months down right away.

Re: Advice on being a first time LANDLORD
 

Hey Yotano, can I rent your place with Stealth Info?

Re: Advice on being a first time LANDLORD
 

Sure but I would need 1st, and last months rent up first.

Re: Advice on being a first time LANDLORD
 

I am giving the character references for MM78

:thumb:

Re: Advice on being a first time LANDLORD
 

Make sure you get landlord insurance. Saved me a lot of money in the long term if something has gone wrong with the flats I rent out.

Also go and talk to the neighbours of the potential rentee if you can, they will be able to provide the best insight

Re: Advice on being a first time LANDLORD
 

The most critical thing to do is get the lease right. Your job with the lease is be as self-serving as possible. Remember your job in writing the lease is to protect you and you only not the tenant. Most of their rights are already in the landlord-tenant act of your state. Most tenants will accept what you put in the lease anyway. At worst, you may have to change something to be more accommodating to the tenant if they protest at the lease signing. Make sure to think up every little scenario that might affect your investment. Here are somethings to put in the lease that are not as obvious:

1) Make sure your lease allows you the right of inspection without notice (or a least 24 hours notice) at any point in their tenancy. This will allow you to demand repairs be made before any damages get out of hand and make sure they are not doing anything illegal, housing any people not on the lease, or any pets not agreed upon. Since you will be making sure that the place is maintained, you will not having an overwhelming amount of damage to deal with in the end making the security deposit sufficient to get it back to rental condition.

2) Make sure the lease allows you to request copies of the utility bills the tenants are responsible for at anytime especially before you return any portion of the security deposit. If the tenant default on their utility bills, they will put a lien on your property.

3) Make sure to specify that only occupants on the lease are allowed to reside in the premises. Tenants try to move in friends, roommates, their children, and other relatives without notifying you. If more people are living there, there is gonna be more wear so you have the right to charge more. Not to mention legal occupancy and insurance liability issues.

4) Don't even think about renting to someone with a big dog.

5) Make sure to specify your responsibility in mediating disputes between tenants. Its up to you if you want to get involved or make it their responsibility to work it out.

6) Its a good idea to make them get renters insurance and name you as secondary beneficiary

7) Make them responsible for snow removal and maintenance of the front and back yard.

8) Make sure they are responsible for any fines that may arise as a result of them throwing out excessive trash or any other violation of town ordinance relating to your property.


9) Make sure that you state that the tenant is reponsible for your legal fees in the event you have to sue them.

10) Also have the tenant waive the 15 day notice to quit requirement that is usually part of the eviction procedure. Allows you to get problem tenants out quicker.

If you are unsure of a tenant try to negotiate a larger security deposit and more months rent up front. You have to be careful about this because depending on your location, there might be maximums written into law.

There is so many other situations depending on your setup, location, etc. If you fail to put something in the lease and decide you want something in writing later, send them an addendum and have them sign. Most will without any issue.

Re: Advice on being a first time LANDLORD
 

Some great points.

I dont rent to anyone with a dog period. I have my own but I keep my pup clean and groomed while most never give their dog a bath.

Pay an attorney to write your lease. Cost me 200.00 to get it done which is cheap to cover yourself.

Re: What Car You Driving???
 

NOTHING is Worse that owning an Apartment Building of 6 + Units in N Y C,,these units are what are know as "Rent Stabilized" which means that the CITY determines your yearly Rental increase,, NOT the the Market,,,I have Apartments where I am Collecting $900-$1200, that I could EASILLY be renting for $1500-$1700, but I cannot,,and you CANNOT Evict the Tennant under ANY Circumstance, as long as they pay the rent,,I have tenants that SIGN Leases that prohibit Pets,,and Guess what,,,they have, Dogs, Cats, and when confronted, the tell me to F^ck off, and take them to court, because they KNOW they will win,,,It S*CKS!!!,,,,This to me is FAR worse than a tenant who trashes your Apartment,,,NONE of this is possible in Buildings UNDER 5 Units

Re: Advice on being a first time LANDLORD
 

Did I read that you are moving to Tulsa?

Have you thought of doing an online realtor course?

Did a quick google....

Oklahoma Real Estate License School - The #1 Source for OK Online License Courses & Classes

That might be a good aid to your future plans, DrYosshi.

Re: What Car You Driving???
 

Recently I've been looking into buying a house that's a couple blocks down from me to rent it out, but I keep second guessing myself mainly because of my busy schedule. What has been your guys experiences as far as the time commitment per house rented, assuming you get lucky and find some good quality renters.

Re: What Car You Driving???
 

Initial it'll take some of your time to get setup with the new renters.. maybe fix some issues with the house ahead of time but once you're setup, it's usually easy.. at least for me.

I setup bank accounts with the same bank my renters are using and have them do direct deposits every month so it's automated there. I check in once in awhile to make sure they're not destroying the place and that's pretty much it. It's been a good experience for so far. :)

Re: What Car You Driving???
 

That's awesome, do you outsource any of the work such as finding the renters or for managing their complaints or do you handle everything yourself? Just put a big for rent sign outside and good to go lol

Re: What Car You Driving???
 

I've been investing most my money in stocks which has provided good returns but I also want to start getting houses to rent, more stable, more guaranteed flow of income

Re: What Car You Driving???
 

I was lucky when buying my houses that they had renters already and I have the SAME renters in my houses... nobody has moved out yet so I haven't had to deal with advertising the property for rent.. but I don't think it would be that difficult.

As for issues with the house I have a guy I call that can do anything for pretty cheap.

Re: Advice on being a first time LANDLORD
 

You need to have the lease and all legal aspects taken care of but the hardest and most important part of owning rental properties is finding a good responsible tenant.

Take your time , always do credit checks ask for employment history with references and you need to know how to interview someone that way you can see through everything and find out a persons true character.

There's nothing worse than renting to someone who turns out to never pay the rent , and destroy ur property , getting an eviction is not easy , you can't just through someone out when there behind a month

It doesn't work like that and if it's a family with kids u could be talking over 6 months of no rent and them destroying ur place

So take ur time , this process of interviewing a potential tenant should be dealt with carefully and professionally and nothing on word of mouth by a friend, you need to do your due diligence with credit reports , background checks, etc.

If u have a good tenant it's the best but a bad one could hurt you

Re: Advice on being a first time LANDLORD
 

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^


Could NOT agree More,,,Good tennants are KEY, a good tenant will take care of your property, just like you would

Re: Advice on being a first time LANDLORD
 

Great stuff guys, by the way what do you recommend in terms of figuring out what you should be charging the renters. I know you got to factor in unexpected costs etc... do you guys normally use a percentage that you multiply the monthly mortgage payment by or do you just do it on a per house basis, handling each one uniquely.

Re: Advice on being a first time LANDLORD
 

You can not determine that until you have the property and have done the research into the area etc.

I would be looking at realty in the areas where you are interested and even looking to decide if you are going to go into Commerical rentals or residential.

Your other consideration is your bank balance. Have you the funds to cover this project?

Re: Advice on being a first time LANDLORD
 

Good point, I've only looked into residential to this point, but will do more research on the commercial route as well. Yeah I'm not worried about the funding aspect of it, more worried about the amount of time i would need from the moment i acquire the property to maintaining the renters happy. But it seems as long as I do my due diligence in the screening process and get good renters that shouldn't be a problem. Appreciate all the advice!

Re: Advice on being a first time LANDLORD
 

Definitely do the credit check. About that neighbours part, seems kind of tough to do for some renters

Re: Advice on being a first time LANDLORD
 

For would be landlords of apartment buildings, make sure of internet access for your tenants.

Who knows some of them might use stealth.

:pound:

Re: Advice on being a first time LANDLORD
 

One you first point,,,you charge whatever the market can bear,,in other words, a 2 Bedroom Apartment in a particular area may only be worth lets say $1200-$1500 per month, and its the specific apartments certain little perks, like a "New Kitchen" or Very close to Transportation that determines exactly where in that $1200-$1500 range your specific apartments rent will land,,

As for Financing, Nowadays, for MOST normal People if you put anywhere from 15%-35% Down on a particular piece of real estate, you should be able to finance the rest, your credit Score will of course determine exactly how much you will need to put down, as well as your interest rate, ec, ect,,,this is by NO Means a Concrete formula, but a good rule of thumb for MOST potential Buyers,,,


As for a propertys price,,,that is normally determined by what is Known as the "Yearly "Rent Roll" or "projected" rent roll,,,it is then a Multiple of that "roll" typically 15-20 times, depending on where the property is located,,,that will give you a value for that piece of property.

For example if a Building is Taking in (BEFORE all Expenses) say,,,$12,000 per Year ($1,000 per Month Rent) and the area it is in other similar properties have sold at a "multiple of 17 times,,then the property that you are considering, should be priced at about $12,000 X 17 = $204,000,,,now that price can go slightly up or down depending on certain specifics, like maybe the property needs a new roof,,,in a case like that,, the price should be a little lower,,ect, ect,,

I hope this post helps you guys

Re: Advice on being a first time LANDLORD
 

As always jammed packed with good info slapped, much appreciated!

Re: Advice on being a first time LANDLORD
 

Yotano

I just thought of something else.

You said you were moving out of state. Is the property you are going to buy in the old state or going to be in the new state?

Reason I ask is if you are states away from your rental you will have to spend money going back and forth, constantly worrying about your property, the expenses and maybe hiring a property manager which is another expense.

Having rental properties in one state and living in another can sometimes be a pita.

Re: Advice on being a first time LANDLORD
 

Sandy

That thought occurred to me as well.

Wonder if any others have had a property manager for the first years of the investment?

Maybe an option too.

Re: Advice on being a first time LANDLORD
 

Just bought this book:

http://www.amazon.com/First-Time-Lan...words=landlord

Hopefully will give me a good starting foundation, if you guys know any other good books let me know, thanks!

Re: Advice on being a first time LANDLORD
 

Networking helps.

You may have associates who are land-lords.

Did you notice on that listing another book? Property Management For Dummies.

Bit of waffle but quite good.

Also noticed some of these are on kindle.... makes it easy to read
:thumb:

Re: Advice on being a first time LANDLORD
 

Looks good just bought that one too, thanks GB! Yeah its funny my next door neighbor actually bought the house on the other side of his house a few years back, so I plan on having a convo with him next time I see him.

Re: Advice on being a first time LANDLORD
 

Another place would be your local bank....

I was lucky because I take opportunity with an established (safe) organisation to handle rental properties.

Usual do your homework
Good Luck

Re: Advice on being a first time LANDLORD
 

Close friend of mine now has a property manager for his 6-unit to handle the renters, screen the deadbeats, and alert him of issues.

Re: Advice on being a first time LANDLORD
 

The rental property is in the old state that I live now, NV. I'm only moving to get more sales and I had a opportunity to get with work for a property management company so that I can learn first hand the in and out of the business in Tulsa. I meet a person who owns the company and I told him if I can work for him really cheap, I just want to learn.

Re: Advice on being a first time LANDLORD
 

Many properties in Florida are managed by property managers.

You really have to be picky because many take the money and never do anything else.

Re: Advice on being a first time LANDLORD
 

But if your property in Vegas and you buy it soon working for someone else wont help you.

If you buy the property and live in Tulsa Ok it will be even harder for you to hire a decent property manager because you will be states away.

You need to hire or look into one before you move or you will be spending a ton of money going back and forth.

Re: Advice on being a first time LANDLORD
 

I would just add that when you are taking applications, always ask for references from the last TWO landlords. Pay close attention to what the second one says.

I have found that a current landlord will say ANYTHING to get rid of a bad tenant. The second landlord on the list might be a bit more honest with you.

And Greenie is 100% right when she says not to rent to people you know. And don't become friends with your tenants. This is a business relationship and if you have to evict someone, it sucks if you have any feelings for them.

Also have some money saved in case of an emergency. Not just for repairs, but for evictions. Evicting someone is a HORRIBLE experience! They have stopped paying their rent, so you are out that income. Now, you have to pay an attorney to start the eviction process. It goes without saying that you will never see another dime from the tenant, so the goal becomes to get them out as quickly as possible so you can re-rent it and get some money coming in again.

Depending on where your building is located, it can take MONTHS to have a tenant evicted. You can't just go into their apartment and start taking their stuff out. You need a court order. And that takes time. Judges in many areas have some discretion in allowing the tenant extra time to stay. For example, in Cook County, Illinois, a parent can claim a sick child and get 60 more days pretty much automatically. During that time, of course, you don't get paid. Then, you have to go back to court and pray that the judge does not grant them even MORE time. In Cook, it takes up to 6 months to evict a bad tenant and these guys know the ropes. In your area, it may be better or worse.

That is why SandyD is absolutely right when she says get the first month, last month and a security deposit upfront. You want a cushion in case the deal goes south. A credit check is a must and also past landlord references. I'm not sure how much good personal references do, as their friends will say ANYTHING. If you have to take them to collections afterwards, I suppose their personal references can be called by the debt collector in an attempt to find their new location information. But for making a decision, they are - in my opinion - of limited value.

Most tenants will NOT trash the place. Just be polite and professional at all times. Even during an eviction. Let them know that you are sympathetic, but that you need the money owed to pay YOUR bills and that you are not evicting them out of meanness.

Also, please don't take from my post that all rentals end in an eviction. The vast majority do not.

Re: Advice on being a first time LANDLORD
 

No problem BUT IF you see Me or Jack in the following suits....don't freak out! Were just making baby formula...yeah, baby formula.

http://cdn.uproxx.com/wp-content/upl...th-650x388.jpg

Re: Advice on being a first time LANDLORD
 

Steady there, MM78!

I did a character reference for you.

:eek:

Re: Advice on being a first time LANDLORD
 

My sisters boyfriend has a management company that takes care of his properties so that he doesn't have to deal with that part in his real estate business, is a agent. They are very expensive but I dont have loan payments to take care off. I will care over management when I learn some more with time and experience. I have gotten lots of good ideas on here.