Book: The Book on Managing Rental Properties

51ZEqgB5BmL“The Book on Managing Rental Properties” by Brandon Turner and Heather Turner

  • “Landlording, also known as property management, is defined for the purpose of this book as the business of protecting and growing one’s real estate investment through the careful placement and oversight of tenants.”
  • “Good property management seeks to continually improve both the condition and financial position of the property being managed. This is done not just to preserve the condition, but to help the investment grow in value. This happens naturally through inflation or appreciation, as well as through increased rents and decreased expenses on the property. A good property manager has a pulse on the market, knowing when to squeeze more from the property to help the investment produce
    greater returns.”
  • “Property management fees vary by location, but typically for a single family house or small multifamily property, you’ll be looking at 8–12 percent of the rent in a monthly fee and a large, one-time fee each time the unit is rented. This placement fee is often 50 percent of the first month’s rent all the way up to the entire first month’s rent. In other words, if your property will rent for $1,000 per month, the property manager might earn $100 per month for their management,
    plus an additional $500–$1,000 each time the property is rented.”
  • “Being firm means holding both parties to the agreements that were legally agreed upo n. This helps keep the emotion out of tough situations more efficient, stressand helps you run a free business.”
  • “Berespectful. Your tenants are people, just like you. Treat them how you would want to be treated, no matter how you personally feel about them.”
  • “Beresponsive. make the t Don’t be difficult to get in touch with, and don’t enant wait too long before you take action communicate what action is being taken or . Do what you say you are going to do, when you say you are going to do it , and keep them in the loop .”
  • “First is your choice of a “full replacement coverage” or an “actual cash value” policy. Full replacement coverage will cover the ent ire cost of rebuilding your property should something drastic happen, whereas actual cash value will likely give you just enough to cover your loan in a bad situation.”
  • “Furthermore, these insurance policies should also include liability coverage, which protects you if you were to get sued. Typically, insurance policies will cover either $300,000 of liability, $500,000 of liability, or $1,000,000 of liability. It’s usually not too much more expensive to go with the higher levels of insurance, and the extra protection in case of a lawsuit is probably money wellspent.”
    See forms at http://www.BiggerPockets.com/LandlordBookBonus
  • “Be sure to gather:
    • Rental Application: Unless you plan to do online-only versions of an application, you’ll want to have numerous applications on- hand at any given point.
    • Acceptance Letter: When you’ve accepted a tenant, an acceptance letter simply lets the tenant know they are approved and gives them the next steps in the move-in process.
    • Deposit Receipt/Deposit to Hold: This form is given when the tenant has paid a deposit to hold the unit until they actually move into the property.
    • Denial Letter/Adverse Action Letter: When a tenant is denied, you must notify them and let them know why they were denied. This form provides a convenient way to do this.
    • Lease Agreement: A lease agreement is a legal contract between the landlord and the tenant that spells out the terms, conditions, and responsibilities of both parties. This is likely the single most important document in your collection.
    Rules and Regulations: In addition to the lease, you will likely also have property-specific rules and regulations that the tenant must follow.
    • Pet Addendum: If you do plan to accept pets, you’ll want to make sure there is paperwork documenting the pet, its breed and description, license number, and any applicable pet fee or deposit, as well as the tenant’s responsibilities regarding the pet.
    • Move-In/Move-Out Checklist: Landlords should always document the condition of the property when the tenant moves in and moves out to accurately account for damages. This is done on the Move-In/Move-Out Checklist.
    • Lead-Based Paint Pamphlet and Disclosure & Certification: For any US property built prior to 1978, the tenant must be given a Lead Paint Informational Pamphlet from the EPA, where the landlord must disclose in writing whether lead-based paint is known in the property and provide any reports associated with the known lead-based paint. If no lead-based paint is known to be present and the landlord doesn’t have any reports, this must also be disclosed, and the tenant must also acknowledge in writing their receipt of the required information and pamphlet.
    • Other State Required Forms: Your state will likely have several other forms that must be given to tenants. For example, in Washington State, we are required to give a Mold Handout that describes what mold is and how to deal with it.
    • Legal Notice to Pay or Vacate: If a tenant doesn’t pay rent by their due date, most states require a Notice to Pay or Vacate form be served to the tenant or be posted on the premises prior to eviction proceedings. Usually the notice gives the tenant “X” number of days to either pay the rent, vacate the premises, or be faced with an eviction.
    • Legal Notice to Comply with Lease: When a tenant breaks a rule (such as parking on the lawn, moving in another occupant, etc.), a Notice to Comply form is usually served. Again, the timing depends on the state where you live, but in Washington State, the tenant has 10 days from the time the notice is served to remedy the problem.
    • Notice to Enter Property: You cannot simply barge in on your tenants any time you want, even though you are the landlord. Except in cases of emergency, notice must be given ahead of time, so the Notice to Enter form will give the tenant proper notice that you plan on sending someone inside their unit. Check with your state’s landlord-tenant laws on the advanced notice required before entering a unit to complete inspections, complete repairs or maintenance, or show the property to would-be renters.
    • Move-Out Instructions: Tenants do not naturally know exactly how the move-out process will happen nor what your expectations are for them in the process. The move-out instructions guide them on exactly how to clean and vacate the property, helping to ensure minimal cost to you, the landlord.
    • Disposition of Deposit: When the tenant moves out, their deposit must be returned to them promptly with specific documentation on what they were charged for and why. The Disposition of Deposit form is an easy way to do this.”
    “A policy binder is a collection of documents that outline how you do everything. It includes checklists, instructions, and details for every aspect of your landlording business. The policy binder should be written so that if you were to suddenly be hit by a truck and a complete stranger were to come in to manage your properties, they could do so in the exact same manner you do.”
  • “We would recommend including the following sections in your policy binder at a minimum. Feel free to add more as needed.
    • Company Mission and Values
    • Company Managers/Owners/Employees
    • Telephone Standards (Hours, Expectations, etc.)
    • List of All Properties, Addresses, Mortgage Companies, and Insurance Companies
    • The Application Process
    • Minimum Standards for Tenant Approval
    • Tenant Screening Process
    • Rental Collection Practices
    • Rent Extension Process and Late Fees
    • Security Deposit Process
    • Basic Lease Terms
    • Pet Policy
    • Smoking Policy
    • Vacating Tenant Process
    • Turnover Process”
  • “We recommend building a relationship with several of the neighbors around your property. Simply stop by, introduce yourself, and give them your business card. Ask them to keep an eye on the property, and if they notice anything weird, to give you a call.”
  • “Before closing on the property, you will definitely want to review the leases for each existing tenant to verify the income and what expenses are the tenant’s responsibility. Do they match the financials that the seller provided?”
  • “An Estoppel Agreement is a simple, one-page form that the tenant fills out letting you know the terms of their lease to the best of THEIR knowledge. If the seller of the property will not let you speak with the tenants and get Estoppel Agreements, you might be dealing with a seller who is trying to hide something. If you do get the Estoppel Agreements signed and discrepancies are found, you’ll want to make sure they are cleared up before closing.”
  • “An Estoppel Agreement should contain at a minimum:
    • The tenants’ names and who resides in the unit
    • The lease term (including start date)
    • The rental amount due each month and the due date
    • The security deposit amount
    • Who pays which utilities
    • Who owns the appliances
    • Whether there are any pets in the property
    • Whether there are any problems or repairs needed
    • Whether there are any other agreements with the landlord”
  • “We like to send a letter to the tenant on the day we take over a property, introducing ourselves and the company, letting them know we are the new owners and will be responsible for taking all phone calls, maintenance requests, lease-related questions, and anything else involving their tenancy. In this letter we like to let the tenants know about some of the improvements that will be taking place at the property in the coming months. This can help reassure the tenant that you are not a slumlord, but someone who takes pride in your work.”
  • “A security deposit is money the tenant gives to the landlord when they gain tenancy to guarantee their compliance with the lease and state and local laws regarding their tenancy. It is also their guarantee that they will return the property to its original move-in condition, minus any reasonable wear and tear, when it comes time for them to move out.”
  • “Never allow a new tenant to write a personal check for the move-in money (this includes the first month of rent).”
  • “Avoid this situation altogether by simply requiring all move-in funds be made with a money order or cashier’s check.”
  • “Never charge less than the equivalent of one month’s rent for the security deposit; in the event that you need to use the security deposit, you’ll wish you had more.”
  • “Always require that the security deposit be paid in full along with the rent prior to the tenant obtaining occupancy.”
  • “In Washington, according to the Residential Landlord Tenant Act, in order for the landlord to collect a security deposit, they must:
    • Have a written rental agreement.
    • Specify the terms of the security deposit and which part, if any, is non-refundable (for professional carpet cleaning when the tenant moves, for example).
    • Deposit the security deposit into a trust account designated specifically for security deposits by the landlord at a financial institution.
    • Provide to the tenant in writing the name and address of the financial institution where the security deposit will be held during the tenancy.
    • Provide to the tenant a receipt of monies paid as the security deposit.
    • Detail the circumstances of how the security deposit can be withheld.
    • Provide a written (detailed) description of the condition of the rental and its cleanliness at the time of move-in, including damages. The description (also called the Move-In Condition Report or Checklist) must be signed and dated by both the landlord and the tenant, with a copy provided to the tenant at the beginning of their tenancy.
    • At the end of the tenant’s tenancy, provide a written statement to the tenant detailing any deductions, along with the remaining refund, to the tenant’s last known address within 14 days of vacating.”
  • “Fair Housing Laws were enacted with the Fair Housing Act in 1968 and amended in 1988 to protect against illegal discrimination by housing providers in regards to:
    • Race
    • Color
    • Religion
    • Sex
    • National Origin
    • Familial Status, Including
    o Pregnant Women
    o Parents With One or More Children Under 18
    o Persons Obtaining or Who Have Legal Custody of Children Under 18
    • Disability”
  • “For example, a quick search in Google brings up the following additional protected classes in certain parts of Northwest Washington, in addition to the federally protected classes:
    • Sexual Orientation
    • Section 8
    • Age
    • Marital Status
    • National Origin
    • Creed
    • Gender Identity
    • Ancestry
    • Use of a Service Animal
    • Parental Status
    • Political Ideology
    • Source of Income
    • Veteran/Military Status”
  • “Another note about the children issue: Simply asking the age of children can get you into hot water when screening for or renting out a property. Instead, we request the dates of birth for all persons living in the unit, so we can determine who needs to be on the lease and who doesn’t. It may seem silly, but this distinction is important.”
  • “If you own a single family home, duplex, triplex, or fourplex and currently live in one of the units or bedrooms (commonly known as “house hacking” on BiggerPockets), the Federal Fair Housing Laws do not apply to you. That said, it’s still probably stupid to discriminate against someone, but it is not covered by the Fair Housing Laws.”
  • “If you are trying to rent out a single family home and you don’t use any sort of advertising or listing broker AND if you own less than four such homes at the same time, the Fair Housing Laws do not apply to your situation. Again, probably still stupid to discriminate, but the Feds won’t be pounding down your door if you do.”
  • “According to HUD’s website, a person is disabled if they:
    • Have a physical or mental disability (including hearing, mobility and visual impairments, chronic alcoholism, chronic mental illness, AIDS, AIDS Related Complex, and mental retardation) that substantially limits one or more major life activities.
    • Have a record of such a disability, or
    • Are regarded as having such a disability.”
  • “When you rent a unit to a person with a disability, the Fair Housing Act requires that you accommodate reasonable requests for changes in rules, policies, practices, or services and that you accommodate the tenant should they have a reasonable request to modify the dwelling or common areas – at their expense – to better suit their needs. Should the tenant choose to make modifications to the rental, they are legally obligated, when reasonable, to return the unit to it’s previous condition once they have vacated.”
  • “However, according to the Washington Landlord Association, medical verification from a qualified medical professional can be requested if the applicant is seeking a reasonable accommodation. (Keep in mind, this is the legal opinion of a Washington State landlord advocacy group, not a lawyer in your city, so don’t take this as legal advice – just passing on tips as we’ve heard them.)”
  • “However, to protect their property from smoke damage or the increased risk of a fire caused by smoking, the landlord may decide to place a ban on all smoking on their properties – except medical marijuana.”
  • “For the use of medical marijuana, the Washington Landlord Association currently suggests designating an outside area specifically for this purpose, but please check with a lawyer in your area if you live in a state that allows medical marijuana.”
  • “Federal law currently prohibits landlords from discriminating against prospective tenants who have had a felony conviction for drug use. Why? Because drug or alcohol abuse is considered a disability.”
  • “In addition to what you’ll read in this chapter, there are many resources online that you can look to for guidance, including The Department of Justice’s website at http://www.justice.gov and The Department of Housing and Urban Development’s website at http://www.hud.gov, to name a couple.”
  • “One way to combat steering is by letting your prospective tenant know about all your available properties and letting them decide which ones they would like to see and which ones to avoid. Also, and this goes back to the Potential Tenant Questionnaire, if you have a predetermined list of questions for every caller, such as their price range, the type of housing they prefer, and the size and location they are looking for, you can quickly and legally point them towards any available rentals you have that meet those requirements.”
  • “We have a file in our file cabinet called “Prospective Applicants,” where all our notes about each person get stapled together and go after our last contact with that person. We also have a file called “Denied Applicants,” where all the information we collected about each applicant goes after they have been denied.”
  • “Postlets.com is owned by Zillow and is a great resource for landlords to create ads that will get maximum exposure. Postlets is an advertisement creation listing site; however, in addition to just creating your ad, Postlets also distributes your ad to numerous other sites (20+), including Zillow, Hotpads, Trulia, Yahoo! Real Estate, Military.com, and many more.”
  • “Postlets is free (for landlords with buildings of less than 50 units), user-friendly, and gives you additional options of including a video or virtual tour in your ad and uploading unlimited pictures.”
  • “Like Craigslist, Zillow is free for the landlord to advertise on and allows users to search for rentals based on certain criteria, including location, price, size, etc., then filters their results accordingly. To post an ad on Zillow, you simply create a Postlets ad, and it will automatically distribute your ad to Zillow and other sites.”
  • “We recommend not putting the address in the newspaper for a couple of reasons: 1) so your house isn’t a sitting duck for would-be criminals, and 2) it forces anyone interested to call you so you can have a one-on-one conversation, do some pre-screening, and further ‘sell’ the property before sending them over to check it out in person.”
  • “Most landlords require that a tenant’s (documentable) income equal at least three times the monthly rent.”
  • “For example, stating ‘no pets’ in your ad will significantly reduce the number of calls from people with pets. Stating ‘no smokers’ will significantly reduce the number of calls from people who smoke.”
  • “The first thing you hear is often an indication (though not proof) of the kind of tenant they might be. If the first words you hear after saying hello is a voice yelling into the phone, ‘How much do I have to have to move in,’ you can assume the tenant might not be a great fit. (We get these calls weekly!)”
  • “If we need time to think about it, we always tell them that we will get back to them. If we know immediately that they will not be approved, we let them know but also still provide them with an application and an invitation to apply. Why? If they know they won’t be approved, they usually won’t apply, but we don’t ever want to be accused of being discriminatory to any of the protected classes.”
  • “Requiring their income to be three times the monthly rent (or more) has been used by landlords for many years, as well as by banks and other financial institutions that supply loans.”
  • “For example, if the potential tenant is employed, you will want to take into account 1) how long the potential tenant has been in their current position and 2) whether the position is considered seasonal or temporary. If they are new to their position or have a history of changing jobs frequently, you may want to require a double deposit for added security if you decide to rent to them.”
  • “Some landlords will waiver on this policy when it comes to tenants who receive Social Security since it is guaranteed money every month. However, even though it is guaranteed, it is still extremely important to require that it equals three times the rent to be sure they can afford the rent in addition to their other bills.”
  • “Always get references from multiple past landlords, and do not rely solely on a reference from a current landlord since you don’t know their motivation for giving a good or bad reference. A past landlord has nothing to gain or lose by being honest, whereas a current landlord may not want to lose a good tenant or may be overly excited to get rid of a bad one.”
  • “An eviction on a tenant’s record is the equivalent to committing murder in a landlord’s eyes. An eviction means the tenant severely violated the rental agreement, usually by non-payment of rent, and rather than make it right, they buried their heads, forcing the landlord to use the law to remove them from the premises. An eviction also usually involves a trashed house, 1-3+ months of lost rent, and extensive damages. If a tenant has an eviction on their record or a judgment from a previous landlord or property manager and you accept them anyway, just know that there is high probability that you will be next.”
  • “To meet our qualification standards, all applicants must have a credit score of at least 600+.”
  • “Keep in mind, according to the Fair Credit Reporting Act, if you deny an applicant based on information received in a consumer report, you have to provide that applicant with the name and address of the reporting agency and give them the option of obtaining a copy of the report themselves. This should also be done if you accept the tenant but require additional securities or different terms due to the information contained in the consumer report. Whenever you deny an applicant or accept them conditionally, send them a Denial/Adverse Action letter, as discussed in Chapter 7 (and included in the appendix of this book and at http://www.BiggerPockets.com/LandlordBookBonus), and simply fill in the blanks.”
  • “When dealing with bankruptcy, we just adhere to the credit score requirement. Our belief is that the credit reporting agencies have done a lot more research into the subject than we have, so we’ll trust their judgment on it. If you do plan to rent to someone who has a bankruptcy, it would be wise to require a double security deposit for any applicant who has a bankruptcy in their past for added security. And of course they better meet every other one of the qualification standards.”
  • “Another important qualification requirement is to require a background check be completed on all applicants over the age of 18. Currently we use either Rentprep.com or MySmartMove.com to complete these reports, and for around $35, we will receive the applicant’s background and credit report. A thorough background report will verify the applicant’s identity (Social Security number, past/current addresses), as well as search the applicant’s background for their:
    • Criminal/Sex Offender History
    • Judgments/Liens
    • Prior Evictions”
  • “Keep this in mind when looking at a tenant’s background or holding to a blanket ‘no felony’ policy, as technically you cannot refuse to rent based on someone’s previous drug abuse-related felony. This would also apply to someone with DUIs or DWIs on their background, as they are drug and alcohol- related!”
  • “• Establish a non-smoker requirement. (We do.)
    • Establish a no pet requirement. (We do, depending on the
    property.)
    • Establish a reasonable occupancy limit. (We limit two people per bedroom.)”
    Before scheduling a showing of the property: “Ask them what they would like to know about the property.”, “Make sure they are aware of all the terms for the rental. This includes items such as rent, deposit, lease terms, pet policy, and what utilities are and are not included, as well as the general description of the home, including amenities.”, “Make sure they are fully aware of the qualification standards for the home.”
  • “Keep in mind when doing a group showing, it will be impossible to be everywhere in the house at the same time, so I don’t recommend group showings when another tenant still lives in the property.”
  • “Before taking the time to interrupt your day, jump in your car, and drive over to your available rental to meet a prospective applicant, always call first to verify the appointment.”
  • “Instruct your prospective tenant to call you to confirm the appointment one hour before their scheduled time. If they call, then you know they will be at the appointment, and you can plan on the showing as scheduled. Since we live and work approximately thirty minutes away from many of our rentals, we always let our prospective tenants know that if they don’t call to confirm their appointment, no one will be there to meet them. If they don’t call, don’t waste your time going to the property.”
  • “If you will be showing an occupied unit, make sure you are aware of the condition it is in and the tenant’s housekeeping skills before scheduling any showings. It would be a waste of time to show a unit that has not been maintained by the current tenant. With that said, if you are confident of the condition and cleanliness of the unit and you will be showing the unit while it is still occupied, be sure to notify your tenant at least one day prior to make sure the showing coordinates with their schedule. Each state has specific laws regarding the amount of notice the landlord is required to give the tenant prior to showings, so be sure to become familiar with the laws in your area.”
  • “Whenever a prospective tenant offers to pay “X” number of months up front, there is a reason, and it’s usually not a good one for the landlord. In fact, it’s a big ol’ red flag.”
  • “We don’t accept prepaid rent; however, you are welcome to fill out our application, and after we have properly processed it and verified that you meet all of the qualification standards for the home, we would be happy to talk about getting you into the home by this weekend.”
  • “I’m sorry, but this home is strictly a pet-free home”
  • “However, if after meeting your prospective tenant and finding out they have a pet you decide to allow it, at least require additional securities, such as a pet fee or an additional deposit, and add a Pet Addendum to your lease.”
  • “Our policy states the security deposit must be paid in full prior to getting the keys. Do you have any family or friends who would lend you the funds?”
  • “For example, the tenant may ask us if they can move in four weeks from the time they applied. If we really like the tenant and we think it’s in our financial best interest, we will try to split the difference and reply, ‘We can only hold the unit for up to two weeks; however, we would require a deposit to hold the unit. Does that sound reasonable?'”
  • “Having the rent due on the first is standard in the rental industry. Again, this question may indicate they are not good at handling their money. It’s not necessarily a deal-killer, but it’s definitely a sign that they live paycheck to paycheck (as many tenants do).”
  • “‘Our policy states your income must equal three times or more the monthly rent.’ Keep in mind that Section 8 is a protected class in some areas, so do your due diligence and make sure you’re not violating Fair Housing Laws before making any decisions.”
  • “Generally potential tenants aren’t asking if you’re the owner simply because they are curious, but because they see the owner as the ultimate authority and the person who can grant them special privileges or exceptions to the rules in regard to the rental. If you’re a non-confrontational type of person, you may be tempted to make an exception (that you will quickly regret) to your rules or policies simply to avoid an awkward conversation. For this reason, you may want to consider adopting the name ‘property manager,’ rather than ‘owner’ for your tenants.”
  • “However, if the rental market is slow and you can compensate for the fact that the lease would be short term by charging more for rent for that privilege, it’s not necessarily a bad idea.”
  • “If we are not accommodating short term rentals and are faced with that request, we simply state: “Our lease is a minimum of one year, though we are
    always looking for tenants who plan to stay much longer.”
    For people who want to move today, “There really are no good reasons for someone needing to be in that much of a hurry to move. A response along the lines of “You are certainly welcome to fill out our application, and after it has been properly processed to ensure you meet all of our qualification standards, we would be happy to discuss your move-in date in a couple days” should be sufficient to send them on their merry way.”
  • “In this situation, it’s best to respond with, ‘Anyone over the age of 18 living in the home must fill out an application, meet our screening requirements, and be on the lease. I’m sorry, but we cannot make an exception to this policy.'”
  • “Some screening companies will also verify the applicant’s driver’s license number, so you can ask for that in this section as well. If the applicant leaves this spot blank, they probably don’t have a driver’s license – not a deal-killer, but information to file away in the back of your mind.”
  • “Names of Everyone Who Will Live in the Home”, “This last question is extremely important to know who exactly will be
    residing with the applicant. While it is against Fair Housing Laws to specifically ask for the ages of the applicant’s children or their relationship to the people listed in this section, they will usually volunteer this information here. It’s okay for them to voluntarily give it, just not for you to ask it. Also, if they list six people and they are applying for a 2-bedroom unit, that’s probably not going to work.”
  • “If your applicant has no rental history, but everything else on them checks out, you may feel comfortable renting to them with additional securities, such as a co-signer or additional deposit funds. Also, if the reason for their lack of rental references is because they are young, that is a much better scenario than someone older who has been ‘living with family and friends,’ as living with family and friends usually means something else is going on.”
  • “If they are self-employed, make sure to get at least the previous two years’ tax returns, as well as their last two months’ bank statements.”
  • “If your applicant answered, ‘Today,’ or ‘ASAP,’ be very careful during your screening process. A tenant wanting to move quickly could mean a few things: 1) they are being evicted, 2) their landlord asked them to leave, 3) they do not plan ahead, 4) they are not currently renters (everyone needs a place to live…where are they currently living and why?), or 5) a variety of other reasons that don’t bode well for you. Another answer to be aware of is if they write a date in the distant future.”
  • “Your application will be denied if you do not meet the below
    standards for qualification.
    * Applicant must have current photo identification and a valid social security number.
    * Applicant’s monthly household income must exceed three times the rent. All income must be from a verifiable source. Unverifiable income will not be considered.
    * Applicants must receive positive references from all previous landlords for the previous 5 years.
    * Applicant may not have any evictions or unpaid judgments from previous landlords.
    * Applicant must exhibit a responsible financial life. Credit score must be a minimum of 600.
    * A background check will be conducted on all applicants over 18. Applicant’s background must exhibit a pattern of responsibility.
    * Applicant must be a non-smoker.
    * Occupancy is limited to 2 people per bedroom. [Note on occupancy limits: When setting an occupancy limit, make sure the limit is based on legitimate reasons, taking into consideration the size of the rental and the number of bedrooms it contains. According to HUD, a reasonable occupancy limit is 2 per bedroom under the Fair Housing Act.]”
  • “After receiving the application back from a prospective tenant:
    • Look it over to make sure it’s filled out completely. If not, hand it back and ask them to finish it.
    • Get a copy of the applicant’s photo identification card so you can verify that they are who they say they are. If they didn’t bring you a copy, you can easily snap a picture with your phone.
    • Collect the application fee. Always charge an application fee when collecting applications to rent your property. The application fee gives the prospective tenant some skin in the game and shows they are serious about wanting to rent the property. Processing an application takes time, and you need to be sure the person you are investigating is a legitimate candidate for your rental and not just someone who is out casually throwing in applications to every place they are mildly interested in.”
  • “When verifying income through an employer, they will probably request the Release of Information signed by the applicant before they will answer your questions. The bottom of your application should include this release.”
  • “Either fax or
    email it to them, then whether you send the form to the employer to
    fill out and return to you or you ask them the questions over the
    phone, these are the items you will want to cover:
    • Position Held
    • Rate of Pay
    • Average Hours Per Week
    • Hire Date
    • Whether Applicant’s Position is Considered Temporary”
  • “In addition, always give the employer the opportunity to offer
    additional thoughts or comments about the applicant if they wish,
    and be sure to get their name and title.”
    tenant screening services for credit/criminal check: RentPrep.com
  • “If there are any discrepancies, you will want to make a note of that and ask the applicant about the addresses in question. Most likely the
    response will be something like, “Oh, I forgot.” It is especially important to talk to the landlords the applicant tried to hide from you.”
  • “If the tenant has a judgment on their background check and you will be denying them because of it, one way to respond to the applicant is by putting the ball in their court. ‘Hey John, your background check revealed a judgment owed to Property USA, LLC in the amount of $4,200. What can you tell me about that?” Likely, they’ll give you an excuse of some kind, but don’t buy into it. Instead, ask them to have the company in question get in touch with you, but you will need to put their application on hold until you hear from them.”
  • “Now, some tenants will try and be sneaky and have a friend pose as their previous landlord. One way to find out if the person you are
    speaking with is really a landlord is by first calling and asking, ‘Do you have any vacancies?’ If it’s a friend, they will quickly be thrown
    off, whereas a landlord will simply answer your question. Another way to verify the person you’re speaking with is actually a landlord is
    by asking for verification of the tenant’s rental specifics, such as the address, lease term, and rental amount. A friend posing as the tenant’s landlord is most likely not going to have this information.”
  • “Here are the important questions recommended for a thorough
    landlord reference.
    • Did tenant stay for stated period? (Listed on the Previous Landlord Reference Form)
    • What was the monthly rent?
    • How much of the rent did the tenant normally pay?
    • Did the tenant always pay rent on time?
    • Did the tenant keep utilities on and paid in full at all times?
    • Did anyone else live with the tenant(s)?
    • Did the tenant(s) ever receive any legal notices (late rent,
    noise, unauthorized occupants, notice to vacate, etc.)?
    • Did the tenant have any pets?
    • Did the tenant maintain the home in good condition
    (housekeeping, lawn, etc.)?
    • Did the tenant give proper notice before vacating?
    • Did the tenant receive their entire deposit back after
    vacating?
    • Would you rent to the tenant again?”
  • “When getting references from the applicant’s previous landlords, always get a minimum of two so you can compare and check for consistency.”
  • “Remember, do not rely solely on a reference from a current landlord since you don’t know their motivation for giving a good or bad
    reference. As we have stated before, a past landlord has nothing to gain or lose by being honest, whereas a current landlord may not
    want to lose a good tenant or may be overly excited to get rid of a bad one.”
  • “If your applicant doesn’t have any (or they have limited) rental references, usually due to their age or being prior homeowners,
    technically they don’t meet all of your qualification standards for the home. Your options in this case are to 1) decline their application, 2)
    accept them without references and take the risk (assuming everything else about them is stellar), 3) require a cosigner, or 4)
    require an additional security deposit if that is allowed in your specific state. Personally, if an applicant meets all of our other standards, we will typically not turn them away due to a lack of references because of their young age or because they were previous homeowners unless there is a more qualified applicant available. Instead, if everything else about them indicated they would be a good tenant, we would simply require additional securities like those we just covered.”
  • “If the applicant was denied based on information contained in a consumer report (which means a background or credit check that a company, such as RentPrep or MySmartMove, does for you), the landlord is legally obligated to send them:
    • An Adverse Action Notice that states the name, address, and telephone number of the consumer reporting agency (such as RentPrep or MySmartMove)
    • A statement that the consumer reporting agency did not make the decision to take the adverse action and cannot give the applicant any specifics
    • A statement letting the applicant know of their right to dispute the accuracy of the report
    • A statement letting the applicant know of their right to request a free copy of the report from the consumer reporting agency within 60 days”
  • “The landlord is also legally required to send the applicant an Adverse Action Notice if they were approved, but only if they agree to certain conditions (most commonly a co-signer, increased rent, or an additional deposit) due to information obtained in a consumer report.”
  • “Screen the cosigner like a tenant. They should fill out an application and be screened thoroughly, including background,
    income, employment, references, etc.”
  • “Be sure the cosigner owns property and lives in the county in which your rental is located.”
  • “Require an application fee from the cosigner as well.”
  • “Fully explain to the cosigner that they are financially responsible for the property.”
  • “You will need to have them sign a Cosigner Agreement, which will be included with the lease or rental agreement that states that they guarantee performance of the lease or rental agreement.”
  • “When using a cosigner, some landlords will also require that the cosigner pay a
  • “performance fee.” The performance fee is
    in addition to the normal security deposit and acts as the cosigner’s personal skin in the game. They will receive the performance fee back when the tenant fulfills their lease, minus any amounts not covered by the tenant’s security deposit. The performance fee gives the cosigner additional motivation to ensure compliance by the tenant since they will have to pay if the tenant does not.”
  • “If they request us to hold the unit longer, we will generally hold the unit for up to two weeks and try to negotiate with them a compromise.”
  • “On our application, we let our potential tenants know that if they are approved, we will hold the unit for them for 24 hours, during which
    time they will be expected to present the Deposit to Hold.”
  • “The Deposit to Hold Agreement should include, at minimum, the following information:
    • Date of agreement
    • Complete address of rental
    • Who the agreement is between (landlord and tenant)
    • Acknowledgment of receipt of Deposit to Hold monies
    • The specifics of the purpose of the Deposit to Hold
    • Final date and time property will be held for prospective tenant
    • Move-in requirements that must be completed during the holding period and before occupancy will be granted, including:
    o Rent paid
    o Deposit paid
    o Other Move-in funds paid (additional deposits, fees, etc.)
    o Tenant-paid utilities put into tenant’s name
    o Lease signed by all (adult) occupants
    • The consequences should they fail to perform by the given date and time
    • Signatures of both the landlord and tenant (s)”
  • “The first, most practical answer would be to ask an attorney in your city to draft up a lease. An attorney’s job is to know the law, so if you
    want to ensure your lease is compliant with all current landlord-tenant laws, this would be a good place to start. Most lawyers who
    work with landlords on a regular basis will have a lease agreement already written up that they will likely give you (for a charge, of
    course).”
  • “If you don’t want to spend several hundred dollars on a lease from your attorney, you can also purchase state-specific legal forms from
    numerous websites online. This would include EZLandlordForms.com, USLegalForms.com, or RocketLawyer.com.”
  • “Finally, if you are using property management software to manage your property, they may have state-specific lease agreements built
    into the software.”
  • “At the top of the lease, be sure to include the names of all tenants who will be living in the property.”
  • “You must include the date that the lease has been signed, as well as the effective dates of the lease term.”
  • “Is this lease a month-to-month lease or a pre-defined term? Six months? One year? Make sure the lease is clear.”
  • “Of course, the address where the tenant will be living should also be listed on the lease.”
  • “For tenants, the distinction between a “guest” staying for a little bit and someone actually moving in can be a “gray area.” To make this
    less gray, simply state in your lease how long a guest is allowed to stay. In our lease, that is 14 days. Anything longer and the tenant
    must be approved by management and added to the lease.”
  • “While you might think this doesn’t affect your bottom line, remember that you have no idea who those nightly
    guests are, so you may want to hold a strict anti-subletting policy on your property. Your lease should lay out exactly what the subletting
    policy is.”
  • “If you are planning to allow pets, you will likely want to mention it in the lease but use a separate form known as a
    Pet Addendum to detail the arrangement.”
  • “Will you allow the tenant to smoke in the unit? (We recommend a firm NO.) What about smoking on the property? Is there a location
    where smoking would be allowed?”
  • “How much will the tenant pay in rent each month?”
  • “How should the tenant pay rent? Mail it? Drop it off? Specify where in your lease, but also be sure to mention that this could change if so
    desired by the landlord.”
  • “Be sure to specify how much the tenant is being charged for the security deposit, as well as under what conditions they could lose that
    deposit. In many states, the name and location of the bank (and sometimes the account number) for where the deposit is being held is
    required to be included on the lease.”
  • “What is the tenant responsible for paying? Water? Sewer? Garbage? Electricity? Gas? Cable? Satellite? Spell it out in the lease.”
  • “When is the rent due? Monthly? On what date? Also, is there a “grace period” where the rent is not considered late?”
  • “If the tenant does not pay by the rental date, what kind of late fee are they charged? Also, if they pay with a check and the check gets
    returned, what kind of NSF penalty are they charged? You may also want to charge a “daily” late fee in addition to the set fee. For
    example, charge a $40 late fee the first day rent is late, with an additional $10 late fee each additional day rent is late.”
  • “The lease should specifically state the access rules for the landlord using the property. This includes emergencies, showing the unit,
    placing marketing materials in the windows, etc.”
  • “If the tenant is brought to court, who is responsible for paying those fees? Spell it out here in your lease to save lots of money if you need
    to ever evict or sue the tenant.”
  • “Other rules you may want to discuss include:
    • Firearms
    • Fireworks
    • Junk on decks, outside, on walkways, or in common areas
    • Satellite dishes
    • Cleanliness/housekeeping
    • Fire/carbon monoxide detector operation
    • Marijuana/smoking policy
    • Vehicles (How many will you allow and where are they
    allowed to park?)
    • Quiet hours
    • Laundry room rules
    • Illegal drugs
    • Drinking
    • Parties
    • Window coverings
    • Reporting water leaks
    • Misuse of plumbing
    • Satellite dishes (Are they allowed on decks? Attached to the
    building? Make it clear.)
    • Mold/mildew
    • Pets
    • Vandalism
    • Changing locks”
  • “Who is responsible for mowing the lawn (and how often), weeding the flower beds, taking care of the pool, etc.?”
  • “You may also attach other addendums to the lease, including Federal and state-required forms (such as the EPA-required Lead Based Paint Disclosure) or additional things you want the tenant to know. For example, we include an addendum that simply explains in excruciating detail the process the tenant must go through when they want to move out. In Washington State, the requirement for giving notice is a little confusing for tenants, so we spell out exactly how it’s done very carefully, and then have the tenant sign it as part of their
    lease.”
  • “In many states you are required to use a Move-In and Move-Out Condition Report for the property.”
  • “Before giving your new tenants the keys to their new home, ensure that:
    1. They have transferred all the utilities they are responsible for into their name.
    2. They have brought you their remaining move-in funds in a guaranteed form: cashier’s check or money order.
    3. All occupants over the age of 18 who will be living in the home have signed the lease, including the Move-In Condition Report.”
  • “Furthermore, when you own rental properties, it’s wise to have an emergency number for tenants to call when they have a problem outside of normal office hours.”
  • “In fact, never give out your home address to tenants. Your tenants might be great people when they move in, but you never know the true character of someone until they are under incredible pressure or going through a difficult time.”
  • “Require that the rent be received by a certain date, not just sent.”
  • See also: http://www.biggerpockets.com/payrentonline
  • “PayNearMe is a way to let your tenants pay rent in cash at a local 7-Eleven, ACE Cash Express, or other business that partners with the company.”
  • “We do offer our tenants one alternative to the late fee penalty, but it requires their planning ahead and communication. We call it the rent extension, and it is not something we advertise to our tenants. However, if a tenant calls us before the 1st to let us know they will be late on their rent, we will offer them a rent extension up to the 10th for a $20 penalty. If they don’t follow through on the 10th, they are hit with the full late fees and eviction notice. The reason for the rent extension is to reward responsible behavior: 1) they planned ahead to
    deal with the problem, 2) they communicated, and 3) they initiated the communication, rather than waiting for a us to call them once the rent was already late.”
  • “When doing the property inspection, take note of the following
    things:
    • Mold and mildew
    • Undocumented pets
    • Broken window blinds
    • Holes in doors or in walls
    • Evidence of extra people living in the unit
    • Smoke detectors and carbon monoxide detectors (if required)
    – make sure they exist, are up to code, and work
    • Leaks under the kitchen and bathroom sinks
    • Dripping water from the bathroom or kitchen sink
    • Dripping water from the bathtub
    • Whether the toilet is continuously running
    • General cleanliness of the property
    • Items piled against heaters or other fire dangers”
  • “This means when the manager is hired, the owner must file form W-4 (Employee Withholding Allowance Certificate) with the IRS, and a form W-2 must be given to the resident manager at tax time. Luckily, the IRS has ruled that the payroll taxes (the 15.3 percent tax comprised of Social Security and Medicare taxes that are split between employers and employees in the US) are not required for the price of the reduced (or free) rent but IS required for any salary paid to the manager. In addition, you may need to purchase ‘worker’s compensation insurance’ for your resident manager.”
  • “The only way to combat late paying tenants and discourage the same behavior in the future is to have a consequence: the late fee. Your lease should describe exactly the terms for paying rent, when it is due, and the
    consequences for delinquency.”
  • “When a tenant’s rent is not received by the due date, the first thing we do is call them.”
  • “Generally, the way we’ve looked at this situation is as follows: When someone is going through a tough time, the rent MUST be paid.”
  • “If you do decide to work with your tenant in regard to their late rent, never let them get more than two weeks
    behind, don’t make it a habit, and only ‘work with them’ within the bounds of the law, protecting yourself.”
  • “Have a reliable list of go-to contractors and handymen that you trust.”
  • “Create a system for documenting and tracking maintenance requests.”
  • “Become familiar with your local laws on the landlord’s responsibility for responding to and dealing with maintenance issues.”
  • “Keep a detailed record of all maintenance requests and their resolutions.”
  • “By giving your tenants multiple avenues for reporting their maintenance issues, you increase the likelihood that they will report it, and you also give them the accurate impression that you care about your property and want to know when things aren’t working as they should.”
  • “If there are going to be underage children home alone, do not send a maintenance person inside without another adult present, for liability reasons.”
  • “In Washington State, the law xii states that landlords must respond within the following parameters:
    • Within 24 hours when the maintenance issue deprives the tenant of hot or cold water, heat, or electricity, or is
    immediately hazardous to life.
    • Within 72 hours when the maintenance issue deprives the tenant of the use of their appliances (refrigerator, stove, or oven), or other major plumbing fixture that the landlord supplies (such as a toilet).
    • Within 10 days for all other maintenance issues.”
  • “We deal with bounced checks the same way we would deal with late rent. As soon as we are aware that the rent check did not clear, we notify the tenant and give them instructions for repaying immediately (in guaranteed funds), along with a late fee. If the tenant cannot pay immediately (which is sometimes the case), they are issued a Pay or Vacate Notice and must pay within the parameters of the notice or deal with the consequences.”
  • “If you receive a bad check from a tenant, it would be wise to require guaranteed funds, such as a cashier’s check or money order, for all future payments from that particular tenant.”
  • “If you are unsure if the unit is
    abandoned, you can always post a legal notice to enter the property based on the legal timeline allowed by your state. Call it an ‘inspection,’ and at the appropriate time, enter. If the tenant has cleared out all of their belongings, that’s a pretty clear sign they are gone. Sometimes it can be tough to know if the tenant has abandoned the property and left a lot of junk or if they simply live with few possessions, so we would err on the side of caution and try to get a solid confirmation that they are, indeed, gone before performing the following steps.”
  • “In Washington State, if a rental is discovered to be abandoned, the landlord may take immediate possession, change the locks, and must post a notice at the rental declaring it to be abandoned. If the tenant has left behind any furniture or personal items, the landlord must store these items in a reasonably secure place and notify the tenant in writing (to their last known address) of the physical whereabouts of their property and how long it will be stored (7 days for property valued under $250 and 45 days for property valued over $250, including personal papers, family pictures, and keepsakes) before it will be disposed of or sold.”
  • “If the tenant requests the return of any personal items left behind before they are sold, they must first pay all the costs associated with the storage of the items before the items will be returned. After the landlord has stored the items for the legally required period, the items may be sold and the funds applied to the tenant’s balance. Any funds above and beyond what the tenant owes must be held for one year, after which time those funds are forfeited by the tenant, and the landlord may keep them.”
  • “In Washington State, if they were on a month-to-month rental agreement, they are liable for rent for the 30 days following when the landlord learned of the abandonment or for 30 days after when their next rent payment would have been due, whichever comes first. If they were on a term lease agreement, they are liable for the rent for the remaining term of the lease, though the landlord does have the legal responsibility to try and re-rent the property as soon as possible to mitigate the damages.”
  • “If a tenant passes away at the residence itself, the police and coroner will secure the home, conduct an investigation if necessary, remove the body, and notify relatives. If there are other tenants still in the home, the landlord and remaining tenants can resume their arrangement as before. The deceased tenant’s belongings become the responsibility of the remaining tenants, and the landlord does not need to get involved.
    If the deceased tenant is the only tenant and they passed away at some other location, the landlord should secure the premises and attempt to get in contact with the executor of the estate since the rental becomes the estate’s responsibility at this point. The landlord should not give anyone access to the tenant’s personal belongings unless they are the executor.”
  • “Should no executor be forthcoming, once the rent is in default, the landlord may proceed exactly as if the house were abandoned by:
    1. Posting notice
    2. Changing the locks and taking immediate possession
    3. Itemizing and storing the tenant’s belongings until the required amount of time has passed
    4. Selling, disposing of, or donating (to family or charity) the tenant’s property after the required amount of time has passed, and
    5. Setting aside any overages from the sale after paying the deceased tenant’s debts to the landlord (for rent, storage of the tenant’s belongings, and any other costs incurred by the landlord as a result of the tenant’s demise) for one year should an executor come forward during the time period.”
  • “Cash for Keys is simply the practice of paying your tenant to move out, knowing that the cost of paying a tenant is cheaper and easier than trying to evict.”
  • “This is where the cash comes in—we offer them a set amount, generally between $300–$500 to be completely moved out of the home by a certain date, usually within 7–14 days. We explain that in order to receive the cash, the home must be free of all personal belongings and clean.”
  • “In Washington State, the law states that after receiving written notice to comply with their rental agreement or lease, tenants have ten days to remedy the problem or they can be evicted.”
  • “In the event the tenant’s guest does not meet your minimum screening standards, you will need to immediately give the tenant an ultimatum: Either the guest vacates, or everyone does.”
  • “If after the inspection there is still evidence of smoking in the unit, you have the decision to either get rid of the tenant, or simply let it go and hold the tenant liable for the damages when they eventually move out or when their lease ends (be that month-to-month or further down the road).”
  • “It’s logical to assume that if the rental has no bugs before the tenant moves in, then bugs appear after the tenant has moved in, they are a result of the tenant. Our lease states that the tenant will be liable for all expenses associated with the extermination and fumigation for infestations that are a result of the tenant. Of course, before implementing any changes to your lease, be sure it is legally allowed by your state-specific landlord-tenant laws.”
  • “We would recommend printing out the PDF produced by the United States EPA titled, ‘A Brief Guide to Mold, Moisture, and Your Home,’ which you can download for free at http://www.epa.gov/mold/pdfs/moldguide.pdf”
  • “Thank the tenant for letting us know about the issue and encourage them to deal with it themselves. Many times, the tenant is just nervous to talk to the other tenant, but with some encouragement from the landlord, they will usually approach the situation with the other tenant without having to involve the landlord directly.”
  • “If #1 doesn’t work, we simply call the tenant making the noise and explain the problem and ask them to keep more quiet.”
  • “If #2 doesn’t work, we send a formal Notice to Comply letter to ask them to stop.”
  • “If that doesn’t work, it might be time to either pursue eviction or wait for their lease to end and not renew it, depending on the situation.”
  • “One tactic that has worked well when a tenant wants to break their lease with us is this: We tell them that they need to keep paying rent, but the day that we get their unit re-rented out is the day we’ll let them out of their lease and refund any portion not used.”
  • “In the State of Washington
    where we operate, you can give the tenant a minimum of 20 days’ notice before the end of the month to end their contract – and we have used it! There is also a bit of fancy footwork needed here. If you give the notice too early, the tenant may not pay their rent for the current month, so if possible, give the notice after the rent has been paid.”
  • “All in all, a normal eviction could cost you around $5,000 or more. But what if you could just offer your tenant $500 to leave the property in good condition? Exactly. That’s Cash for Keys.”
  • “To find a good attorney, ask for references from other landlords.”
  • “After the minimum number of days have passed (as defined by the notice you served), it’s time to move forward with the eviction. If you hire an attorney, this is where the attorney will likely take over the process, letting you get back to your life. Be sure to give your attorney all of the information they will need to get the whole picture, including:
    1. A copy of the tenant’s lease
    2. A copy of the notice that was served
    3. A brief summary of the situation”
  • “Usually, the tenant’s property will be placed outside on the nearest public roadway, but not always. If they don’t claim it, it can be discarded and likely picked through by the homeless in the area. The tenant can request through the court that the landlord store their personal things (yes, really); if this is the case, you will need to store the tenant’s things in a secure location. Of course, the tenant would be required to pay for the expense accrued for the storage before getting their things back, but there is no clear rule on when they need to pay for it, so if the tenant never claims it, you may up eating this expense and simply having to discard the property at a later time.”
  • “Hiring a general contractor will likely be the most expensive option, as they must pay for their overhead and for their supervision on the project, but hiring a GC is also usually the easiest option, as they handle the majority of the hassle and coordination.”
  • “However, good
    handymen can be incredibly hard to find. The good ones tend to become general contractors; the bad ones will claim to be amazing, only to destroy your property, take your money, and leave you penniless.”
  • “When rehabbing a property, the construction moves in phases. Demo, then drywall. Drywall, then painting. Painting, then trim. On and on it goes until the project is done. Therefore, if you want to find a good contractor for one part of the job, ask the contractor next in the lineup. For example, if you want to find a good framer, ask the drywall person. If you want to find a good drywall person, ask the painter.”
  • “visiting construction supply stores (for example, a tile supply store if you need tile work) and asking the employees who work there who they would have work on their houses. These employees have a unique view of the quality of materials that their customers (contractors) use, as well as the experience level and management style of those who buy from them.”
  • “head to a big box home store like Home Depot or
    Lowes early in the morning, perhaps 6:00 a.m. and see who is checking out at the contractor’s desk. Those contractors are typically the “go-getters” who are up early to get their supplies and get to the job site. You don’t typically see hungover contractors out at that time of the day!”
    Contractor screening questions:”• How long have you been in this line of work?
    • What skill would you say you are the best at?
    • What job tasks do you hate doing?
    • In what cities do you typically work?
    • How many employees work for you? (Or ‘work in your company’ if you are not talking to the boss.)
    • How busy are you?
    • Do you pull permits, or would I need to?
    • If I were to hire you, when could you start knocking out tasks?”
  • “The first thing we do now when looking for information on a certain contractor is to simply search Google for their name and their company name.”
  • “For example, if we wanted to find out more about First Rate Construction Company in Metropolis, we would search things like:
    • First Rate Construction Metropolis
    • First Rate Construction scam
    • First Rate Construction sue
    • First Rate Construction court
    • First Rate Construction evil”
  • “In addition to Google, there are numerous websites (such as CriminalSearches.com) that allow you to research more deeply into someone’s past to discover little-known information about them. You could also run a background/credit check on your contractor, exactly the same way you would with a tenant. The choice is yours on whether or not you run a background check, but just know you can never be too careful.”
  • “You may want to ask the reference several questions, like:
    • What work did they do?
    • How fast did they do it?
    • Did they keep a clean job site?
    • You are related to [contractor’s name], right? (If they are, they will think you were already privy to that information and will have no problem answering honestly!)
    • Any problems working with them?
    • Would you hire them again?
    • Can I take a look at the finished product? (This could be in person or via pictures.)”
  • “Contractors love to brag about their big jobs, so he or she will likely regale you with the story of how much work they needed to do and how great it looked at the end. Find out the address, and then go to the city and verify that a permit was pulled for that project. If not, the contractor did all the work without a permit, which is a good indication they are not a contractor you want on your team.”
  • “Before hiring the contractor to do a large project, hire them to do just one small task, preferably under $1,000 in cost. This will give you a good idea of what kind of work ethic they have and the quality of work that they do.”
  • “Larger jobs tend to work better by ‘bid,’ whereas smaller jobs tend to work better by hourly pay, but there is no hard and fast rule for either.”
  • “Most good contractors should have their own contract, but if not, you can pick one up online through websites like http://www.uslegalforms.com”
  • “Require all contractors to give you detailed
    invoices for the work they do and keep an accurate record of all the money you spend.”
  • “Therefore, when a large rehab project has been completed, always get the contractor to sign a lien release form. This form simply states that the bill has been paid in full, and the contractor releases their right to file a lien on the house.”
  • “When your tenant tells you they are moving, it’s important that your tenant gives you their notice in writing. (So be sure to include that requirement in your lease.)”
  • “When a tenant doesn’t give us adequate notice that they will be moving, we give them two options:
    1. They can stay the extra month, or
    2. They can continue with their plans to move before the end of
    the current month, but they will be held to their obligations.”
  • “One common exception of the notice to vacate rule: If your tenant is in the military and they get reassignment or deployment orders, they may be allowed to break their rental lease without repercussions. It’s a small price for us to pay for those serving in our US Military.”
  • “While it’s understandable why a tenant would want to do this (they are most likely saving up for their next place), never allow a tenant to use their deposit as the last month’s rent.”
  • “In your Move-Out Packet, begin with a letter confirming that you have received their notice to vacate, then give an overview on what is included in the rest of the packet to make the move-out process as smooth and easy as possible for them. Here’s what our Move-Out Packet looks like:
    • Acknowledgment of Notice to Vacate
    • Itemized List of Common Deposit Deductions
    • Tenant Duty Checklist: Vacating and Cleaning Instructions
    • Forwarding Address Form for Disposition of Deposit and
    Refund
    • Copy of Move-In Condition Report
    • Copy of Rental Agreement or Lease (Optional)
    • The Move-Out Survey”
  • “How would you rate the service you received from us?
    • How would you rate the quality of service you received while
    renting your home in regard to handymen and contractors?
    • How would you rate your overall experience with us?
    • What is your overall impression of the home you rented?
    • What did you like most about the home you rented from us?
    • What did you like least about the home you rented from us?
    • Do you have any suggestions for improvements we could
    make to the home?
    • Would you rent from us again or refer others to us in the
    future?”
  • “Never do your sole move- out walk-through while the tenant is still living in the home, as damages can easily be hidden with furniture, and more can happen while they are moving out.”
  • “Whether your tenant has any security deposit deductions or not, you as the landlord are required to send the tenant a statement itemizing the exact refund or balance owed, which is where the Disposition of Deposit comes in. The landlord is required to send the tenant the Disposition of Deposit and corresponding refund (if they get one) within a certain amount of time, which varies from state to state, so be sure to become familiar with the specific law in your jurisdiction. In Washington State, the penalty for the landlord who doesn’t send the Disposition of Deposit within 14 days after the tenant has vacated is harsh. The courts can order the landlord to repay double the amount what the original deposit was for, EVEN if the tenant owed a balance.”
  • “if you followed our recommendation to adequately document everything (in writing, with pictures, video, receipts, and bids) and you have followed all your state specific laws, you have already shown them that you have a solid, legal claim. Most likely they will drop it, but in the event that they do not, you are already prepared for court due to your prior thoroughness.”
  • “If you don’t want to simply ignore it, but the sum is too small to take larger action, you can also set up a system that mails out a new invoice monthly, as a constant reminder that they owe money. Perhaps someday (like after they get their tax return), they will pay the bill. It might cost you a dollar a month to do this, but someday it might pay off.”
  • “Our in-house manager spent nearly a week negotiating with the angry tenant, and in the end, we agreed to accept 50 percent of what was owed.”
  • “We will typically choose the collection agency route when the tenant owes between $1,000 and $4,000 and they ignore our attempts at collecting the debt on our own.”
  • “If the money owed to you is substantial and you think you can get the money from the tenant if a court makes them, you could pursue a lawsuit in small claims court.”
  • “Instead, there are several online fax companies that give you a fax number, and you can send and receive faxes directly online. Check out http://www.MyFax.com or http://www.HelloFax.com for two options if you plan to go this route.”
  • “Keeping track of the miles you drive for business is incredibly important when tax time rolls around. Many of the miles you drive will be deductible, saving you more money than you might think.”
  • “No matter how many units you are currently managing, it’s important that you have all your tenants’ names, addresses, phone numbers, emails, and other contract information available when you need it.”
  • “With a website, you can advertise your vacancies, allow tenants to print out documents (applications, rules and regulations, etc.), give tenants the ability to pay rent online or submit maintenance requests, and more.”
  • “Although you could do it either way, if you have fewer than five properties, we would suggest having separate bank accounts, savings accounts, and credit cards for each property.”
  • “California:
    Late Notice Required: 3-Day Notice to Pay or Quit
    Lease Violation Notice Required: 3-Day Notice to Remedy
    Late Fees: Reasonable late fees allowed and must be mentioned in the lease.
    Lease Termination Timeline: 30-days for month-to-month. No
    mention for termination of annual Security Deposit Laws:
    Maximum deposit of two-month’s rent (for unfurnished) and three-month’s rent (for furnished). Any refunded amount must be itemized and returned within 21 days.
    Move-in/Move-out Document: Not required unless withholding security deposit above $126.
    Notice to Enter: 24-hours, unless emergency
    State Law(s):
    http://www.dca.ca.gov/publications/landlordbook/index.shtml”
  • “Washington:
    Late Notice Required: 3-Day Notice to Pay or Quit
    Lease Violation Notice Required: 10-Day Notice to Remedy or
    Quit
    Late Fees: A reasonable late fee may be charged, but must be outlined in the lease. Late fee of 20% or $20.00, whichever is greater, is considered reasonable.
    Lease Termination Timeline: 20-day for month-to-month. No mention for termination of annual with fixed terms
    Security Deposit Laws: No maximum security deposit. Any refunded amount must be itemized and returned within 14 days
    Move-in/Move-out Document: Move-in required. Move-out not
    required unless withholding security deposit
    Notice to Enter: 24-hours, unless emergency
    State Law(s): http://apps.leg.wa.gov/rcw/default.aspx?cite=59.18”

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s