Advice on being a first time LANDLORD

yotano211 · #1 10-05-2013

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.

yotano211 · #2 10-05-2013

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?

GreenBean · #3 10-05-2013

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.

Sandy D · #4 10-05-2013

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.

MM78 · #5 10-05-2013

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

yotano211 · #6 10-05-2013

Quote:

Originally Posted by MM78

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

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

GreenBean · #7 10-05-2013

Quote:

Originally Posted by yotano211

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

I am giving the character references for MM78

JamesNorth101 · #8 10-05-2013

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

Futuremogul888 · #9 10-05-2013

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.

Sandy D · #10 10-05-2013

Quote:

Originally Posted by Futuremogul888

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.

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.

slapped · #11 10-05-2013

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

GreenBean · #12 10-05-2013

Quote:

Originally Posted by yotano211

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?

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.

123 · #13 10-05-2013

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.

**aspkin** · #14 10-05-2013

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.

123 · #15 10-05-2013

Quote:

Originally Posted by aspkin

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.

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

123 · #16 10-05-2013

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

**aspkin** · #17 10-05-2013

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.

Dmshark25 · #18 10-06-2013

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

slapped · #19 10-06-2013

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

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

123 · #20 10-06-2013

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.

GreenBean · #21 10-06-2013

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?

123 · #22 10-06-2013

Quote:

Originally Posted by Greenie

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?

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!