Archive for the ‘How to manage tenants’ Category
Thursday, November 29th, 2012
Update on “Best Real Estate Investing Blog” Contest
The results are in for the Best Real Estate Investing Blog Contest, and while I did not win, I took the loss in stride, with a minimal of gratuitous moping and whining.
I want to express my heartfelt gratitude to all of you who voted for my blog. Thank you for your support!
Congratulations to Susan Lassiter-Lyons at The Investor Insights for winning the blog contest!
Memos and Tenants
A light, tender, sensitive touch is worth a tone of brawn.
–Peter Thompson
As I mentioned in an earlier post, when we hear our tenants humming “Stairway to Heaven” that’s a sign that they may be they ready to move on.
However, my wife and I do everything in our power to keep them from ever even consider moving. We want them to stay forever! It’s the best way to keep our business operating smoothly and profitably.
In the rental house business, we use a light touch when communicating with tenants. A phone call is good when you need to quickly get in contact with your tenant, but if it’s not an urgent matter, our preferred means of communication with tenants is by sending them memos by regular mail.
Use the low-key approach
For example, if the tenant is not keeping up the yard work around their rental property, as agreed upon in the rental contract, we will write them a note in a calm and respectful manner identifying the problem. We may make a reference to the section of the contract that requires them to keep up the yard (but only if they are a repeat offender), and describe what needs to be performed to meet the terms of the agreement.
A phone call could easily put them in a defensive position, and turn into a heated conversation, which is the last thing we want. With a memo, the tone stays calm and the point gets made. And, we have a written record of what we have told them that we keep in the tenant’s file folder.
Keeping tenants informed
We keep our tenants informed about activities that we have planned for their property. We will usually call and let them know well ahead of time if we plan to do some preventative maintenance, on the roof, for example. If a plumber cancels an appointment, we’ll call them so they are not waiting around all afternoon for no reason. It’s really just practicing common courtesy.
As an example, here is a memo that I recently sent to two of our best tenants:
MEMO
Date: November 5, 20xx
To: xxxx and xxxx
Location: 2551 N. Banyon Blvd.
Re: Yard work
This is just a friendly reminder that the front yard looks like it might need a little maintenance. I noticed that the weeds were starting to take over the yard a little.
If you could tidy it up a bit, I’d appreciate it. If you need a weed wacker just let me know. I’d be happy to loan you one.
I’m very grateful to have you as tenants. You have been really great about taking caring of the property.
If anything comes up where you need any help with repairs or anything else, please don’t hesitate to contact me.
(If you have already done this yard clean up, please disregard this letter.)
With best regards,
Terry Sprouse
270-xxxx
——–
Tags: how to manage tenants, managing rental properties, managing tenants with memos, real estate investment blog contest, sample letter to tenants, sample memo to tenants, Susan Lassiter-Lyons, Terry Sprouse, The Investor Insights, using the soft touch with tenants
Posted in Fix em Up Rent em Out, How to manage tenants, how to turn your home into a rental property, managing tenants, tenants, tenents, turn my home into a rental | 17 Comments »
Wednesday, November 7th, 2012
Eventually, tenants experience that “feeling I get when I look to the west, and my spirit is crying for leaving,” which Led Zeppelin describes, and they move away.
When this happens, you will want to make the transition of the tenant out of 
the house as smooth as possible. The best way to do this is by telling the tenant what you expect from them. We send a letter that clearly spells out the checkout process. This way there are no misunderstandings, we are all on the same page, wavelength, sheet of music, or stairway to heaven.
Move Out Information Letter to Tenants
Some key things that we mention in our letter are:
1.) How much of their security deposit will be returned.
2.) There will need to be a review of their check in sheet (and attach a copy for them).
3.) What you expect in terms of house cleaning.
4.) Reminders to contact the utility companies to disconnect services in their name.
5.) Reminders to cancel newspaper and other subscriptions, and to provide the Postal Service with a change of address form.
6.) Reminders to contact us when they are ready for the final house inspection.
7.) A note that if keys are not returned, they will be charged.
8.) Any costs that we must pay to repair the house will be taken out of their security deposit, and we will refund the money due them within 10 days.
Download a copy of my “move-out” information letter to tenants.
(The link to my letter may not work on Internet Explorer. It seems to work fine with Google Chrome.)
Why be lenient with the damage deposit?
In general, we are pretty lenient when it comes to charging tenants for little things on the checklist. If they move out, and they have been good tenants, we are going return to them most, if not all of their security (or damage) deposit back, barring some obvious big broken item.
Our perspective is that we made a lot of money from the tenants over the years, and we don’t want them to leave on a sour note just because they thought we might have overcharged them on some ticky-tack repair.
Men of the World Unite!
John and Todd over at FearlessMen.com are staging a mustache and beard growing contest to help raise funds for charity.
I have confidently signed up to participate in the contest, and I have every intention of winning!
I invite you to join me.
The rules are simple:
1. Starting November 1st, start growing you mustache or beard. In the process they will encourage others who see them as they selflessly promote this great cause, to donate to the selected charities.
2.December 1-16 the contestants will have their photos posted at Fearlessmen.com so everyone can vote on said mustaches and beards. On Dec. 17th, the winner will be announced
3. The winner will receive prizes.
For complete details, charge over and read John’s article:
_____________________
Coming VERY Soon!
- How to Turn Your Home into a Rental House, Instead of Selling It
Tags: Beard and Mustache Competition, damage deposit, fearless men, Led Zeppelin, managing tenants, move out letter to tenants, Movember 2012, Stairway to Heaven, the right way to handle tenants who are moving out, what to do when tenants move out
Posted in How to manage tenants, how to turn your home into a rental property, investment house, investment property, investmet properties, landlording, managing apartments, managing tenants, tenants, tenents | 29 Comments »
Friday, August 10th, 2012
Tthe Arizona Network of Real Estate invited me to give a presentation to their group about my book “Fix em Up Rent em Out.”
I thought the video might be available to the general public but it looks as though that’s not going to happen.
However, so that no one feels left out, I am going to provide a summary of the key points that I hit during the presentation. As someone who was regularly picked last for teams in gym class, I’m sensitive to people feeling left out. Casting modesty to the wind, I am also including exclusive photos of the event.
So here are:
The 5 Rules on How to Lose Money and Get Your Rental Property Trashed by Tenants (based on an article by Andrew Stefanczyk)
1. Choose the Worst Possible Area
Location will determine the kinds of tenants you will attract, and how much rent you can fairly charge.
Do you want these bearded wonders as tenants?
The best approach is to identify target areas in your city where you would like to focus your purchases. I like to focus on “transition zones” (where there is a mixture of housing types) which are good for investors because we can purchase properties at lower prices, and there is high demand to live in these areas.
2. Put in the very best of things when fixing up an investment property
Use new and expensive sinks, doors, refrigerators, light fixtures, etc. Never shop at stores that recycle construction supplies. Spare no expense.
Of course, the problem is that tenants will not take care of our properties as well as we would,
Habitat Store
so we end up with many broken or worn out items. The better alternative is to shop at used building supply stores, and to purchase good, inexpensive, supplies for our rental houses. One such store is the Habitat for Humanity store.
3. Make sure you have absolutely no experience in make basic repairs
Not knowing how to change electrical outlets, unclog drains & toilets, and replace broken windows will cost quite a bit down the road.
The better way is to:
A. Learn as you go, and comply with EPA regulations
B. Take construction classes at junior college
C. Learn from handymen and contractors
D. Take the Zen approach to house repair – learn to do everything yourself
5. Utilize fix-up books, investing books, & YouTube to find answers on how to make house repairs
4. Do not screen your tenants
Being as uninformed as possible about who you rent to may be the best way to lose money as a landlord. Do not ask for or check references. Do not call previous landlords and ask questions like, did they pay rent on time? How was the condition of the house or apartment when they left? Did they ever disturb neighbors with loud music or shouting matches? How often would you have to make special trips for repairs? Being as uninformed as possible about whom you rent to will make a huge difference and will increase the chances that you will get tenants that will trash your property and refuse to pay rent.
However, the better way is to:
A. Use a checklist for tenants. Decide what kind of tenant that you want ahead of time.
B. Look at their paycheck to verify income.
C. Check county records to see what illegal activities they’ve been up to.
D. Know the Fair Housing Act. Never select tenants based strictly on “race, color, national origin, religion, sex, familial status or handicap (disability).”
E. To find new tenants, use Craiglist, put up arrow signs, and host an “open house.”
5. Make sure you have not learned about your rights as a landlord
Be completely unfamiliar with the eviction process to guarantee long, drawn out disputes with tenants. Don’t keep up to date financial records or copies of correspondence with tenants. Most states provide online information about tenant and landlord rights so avoid reading these.
The better way is:
A. Get an authoritative legal guide like “The Arizona Landlord Deskbook” by Carlton Cassler.
B. Copy forms and letters from your legal book to send to tenants.
C. Comply with legal ways to deal with bad tenants.
D. Use memos to communicate with tenants so you have a record of correspondence.
E. Use a month to month lease instead of long-term lease to more easily scrape off bad tenants like barnacles.
F. Reward tenants for paying on time by discounting their rent $25. 
G. Send good tenants Target gift cards for Xmas.
In Conclusion
Share Your Knowledge
“Each of us has cause to think with deep gratitude of those who have lighted the flame within us.”
–Albert Schweitzer
Carve Out Your Niche Update
My award-winning book on self-publishing, Carve Out Your Niche, is now available in Kindle format.
The Midwest Book Review called Carve Out Your Niche,
“Invaluable for anyone seeking to successfully write, publish, and market their own work.”
Tags: Arizona Network of Real Estate, avoid losing money with rental houses, buying rental houses, carve out your niche, construction materials, do it yourself, Habistore, Habitat for Humanity, landlord rights, learn to make repairs, managing tenants, screen tenants, share your knowledge, target areas, transition zones, Zen
Posted in Arizona Landlord Deskbook, book review, book review real estate investing, book reviews, buying real estate, carve out your niche, create wealth in real estate, do it yourself, excellent real estate books, finding tenants, Fix em Up Rent em Out, fixer upper book, fixer upper houses, for rent, home buying, house buying, house repair, house repairs, how to make money renting housing, How to manage tenants, How to start your own house fix up and rental busines, investing in real estate, investment house, investment property, investmet properties, landlording, learn repair skills, learn to invest in real estate, learn to make repairs, legal information, making repairs, managing tenants, maximize rental profits, month to month lease, mortivation, opportunity zone, places to advertise for a tenant, presentations, quirky tenants, real estat investing, real estate books, real estate investing, real estate principles, rental house improvements, rental houses, rental management, rental properties, rentals, renting, repair, repair books, repairing properties, repairing rental houses, repairs, selecting tenants, share your knowledge, success, tenants, tenents, transition zone, Zen of Real Estate Investing | 14 Comments »
Monday, July 2nd, 2012
One of the jobs associated with operating a fixer upper and rental house business is to keep your rental properties in ship shape!
With the annual approach of summer rains, now is almost the last chance to make rental house roofs water proof before the watery onslaught. As someone who has a sworn aversion for arriving too early to parties, I subscribe to the time-tested philosophy of “better late than never.”
This morning I applied some black roofing cement on some areas on one of my townhouse roofs. I had located some cracks upon my inspection of it about 2 weeks ago.
The first photo shows the area in question, where I had previously applied a small amount of plastic roofing cement, but today I was going to put on some more and cover a broader area.
The second photo shows the application of the plastic roofing cement. We apply one layer of cement, then put a white membrane on top of that, followed by a second layer of cement. The membrane allows for more cement to be applied.
Below is the “after” photo. You can see that in addition to the corner, we hit a few other cracks with our roofing cement on the sides of theroof. Later, we’ll come back with white roofing paint to cover the black cement.
A good rental house
My wife and I purchased this 2 bed 2 bath townhouse in 1993 and lived in it for 10 years before moving on to a bigger house (to accomodate our growing family), and turning this property into a rental house in 2003.
Its been one of our best rental houses because it is in a “transition” zone (aka “opportunity zones”) where there is heavy demand for housing, and it is easy to care for because it is compact (1100 sq ft with small front and back yards). The townhouse perfect for single people or small families.
We originally purchased it for $53,000 and we charge $750/month (more if the tenants have pets).
Tags: fixer upper houses, fixing leaks on roofs, opportunity zones, roof repair, transition zones
Posted in Fix em Up Rent em Out, fix up houses, fixer uppers, fixer-upper business, flipping houses, house repair, house repairs, How to manage tenants, how to start a real estate business, How to start your own house fix up and rental busines, learn repair skills, learn to make repairs, making repairs, managing apartments, managing tenants, maximize rental profits, opportunity zone, property damage, purchase second home and turn current home into rental, rental house improvements, rental house protection, rental houses, rental management, rental properties, rental property, rentals, renting, repair, repair books, repairing properties, repairing rental houses, repairs, spare time, tenants, tenents, transition zone, turn my home into a rental, turn your house into a rental, turning a primary into a rental, turning an owner occupied home into an investment property, turning my home into rental property, turning your home into a rental property, Uncategorized | 5 Comments »
Monday, June 4th, 2012
This guest post is from Endre Rex-Kiss, an online marketing, social media and human resource enthusiast. He currently represents FidelisAM, a US based agency providing employment and resident screening services. Follow his occasional guest blogging activities on Twitter.
Tenant screenings is the way to go if you want quality tenants and most landlords come across potential tenants who are either not what they claim to be or have serious behavioral problems. This article takes a look at the funniest screening stories landlords have had and their aftermaths. So sit down, relax or better still grab a cold bottle of beer to nurse while you go through the experiences below.
The Estranged Wife
A couple with no kids moved into a 4 bedroom duplex in the suburbs, the house and environment provided the perfect scenery for the couple but there was only one problem and it was that of meeting up with their mortgage payments. So they decided to put a room up for rent. The necessary adverts were created and finally a prospective client came knocking, he was the perfect tenant for he claimed to be single, had no pets, did not smoke, drink, do drugs and had a well-paying job. This obviously was too good to be true so the couple decided to hire an agent to conduct a little screening on him. After two days, the agent returned to tell the couple that they had been invited to have dinner with the previous landlord of their prospective tenant. On getting there, they were told that the tenant usually preys on sympathetic landlords and if you fall into his trap by renting a room to him, he would move in, behave for some days but a week later a woman who would claim to be his estranged wife would come visiting for some time and then finally move in with a cat. They would then proceed to co-habit like pigs, steal your property and when rent is due, disappear like thieves in the middle of the night.
Ghost Tenants
A couple responded to a landlord’s accommodation advert, they came to see the Landlord and professed that they loved the apartment and would be willing to rent it for the long term. The landlord was convinced that they were the perfect tenants so when the wife came calling the next day without her husband (due to the supposed fact that he works late) to ask for the keys to the apartment so she could look through it, the landlord duly obliged. A day passed, the lady did not return, two passed and she was still missing. The landlord quickly called his agent who conducted a quick search only to find out that the woman and her husband had already moved into the apartment. The police was called and the couple quickly evicted.
Dead beat Prospective Tenant
An agent once recommended a tenant who had the best recommendations ever; he had a good job, perfect credit and good relationships with his previous landlords. A meeting day was fixed and the prospective client shows up with a dead beat car and the attitude of someone who was one step ahead of the law. The landlord who needed to rent his facility out as soon as possible, overlooked this tell-tale signs and had agreed to lease the apartment to the tenant. The recommended signatures had already been traded and an upfront deposit had been made but as luck would have it, a police officer who was driving randomly through the neighborhood spotted the prospective tenant, felt his face was familiar and got down to trade some questions. Suddenly, the tenant bolted and a foot race began. The tenant was finally apprehended and the landlord discovered that the name, details and personal information given by his perfect tenant had nothing in common with the tenant.
The Thief
A couple came with an agent to view a landlords property, after going through it, they decided it was perfect and would be signing the necessary papers the following day but there was just one issue, they needed the house repainted. The landlord obliged, carried the necessary equipment to the house and started painting. He painted into the night and decided to spend the night there instead of returning home late. In the middle of the night, he began to hear strange noises at the side of the house, quickly he got up to investigate and on getting there, he found his prospective tenant trying to detach an A/C unit.
These stories show that conducting an in-depth screening which should include: former landlord credit checks, recommendations and past criminal activities are highly recommended.
Upcoming Speaking Engagement – Terry Sprouse (author of Fix em Up Rent em Out)
I will be making a presentation to the Arizona Network of Real Estate Investors. Mark your calendars.
Where:
Fidelity National Title, 6760 N. Oracle Road, Suite 100, Tucson, AZ
When:
June 7th, 2012
Time:
Meeting begins at 5:30 pm, presentation at 6:00 pm
Title: The 5 Rules on How to Lose Money & Get Your Rental Property Trashed by Tenants
Tags: Endre Rex-Kiss, Fix em Up Rent em Out, funny tenant stories, landlord stories, managing tenants, Terry Sprouse
Posted in bad tenants, do it yourself, Fix em Up Rent em Out, fix up houses, fixer upper houses, fixer uppers, How to manage tenants, investing in real estate, landlording, managing apartments, managing tenants, places to advertise for a tenant, quirky tenants, real estate investing, rental houses, rental properties, rental property, tenants, tenants move our, tenents, Terry Sprouse, turn your house into a rental, Uncategorized | 4 Comments »
Saturday, October 16th, 2010
Here is another letter that I recently received that asks some pertinent and common questions related operating a fixer upper house business, that I would like to share with you.
Dear Terry,
We’re moving along towards renting out our first rental house…and I was reading your month-to-month lease agreement from the Never Sell Your Home book– it looks very good and we plan on using much of it, but I did have a few questions:
1) What % of the monthly rent do you require as a security deposit?
2) Should the Lessee(s) be responsible for all utilities, or should I pay the utilities for them?
Thanks for your help – !
Steve Klausman
Santa Fe
Dear Steve,
Congrats on your progress in preparing to rent our your first house. Don’t get discouraged if it’s rough sledding at first, the first house is the one that you learn the most from.
Security Deposit
In answer to your first question, the amount that I charge for security deposit is the amount of one month’s rent. So if the monthly rent is $900, the security deposit is also $900.
Some tenants may have trouble coming up with both the rent and the security deposit at the same time, in this case, a tidy sum of $1,800. So, I sometimes let them pay the security deposit over the course of 2 months, to make it easier on them.
Since you are just starting in the business, something to do from the beginning is to keep the security deposit and the monthly rental money from your business in a separate bank account from your personal bank account. The IRS doesn’t like to see the funds mixed together.
Who Pays Utilities?
In answer to your second question. I always have the tenants pay all the utilities themselves. Not only does it encourage them to conserve, but it vastly simplifies the process for you. Also, I have the tenants put the utility accounts in their own name, so that I’m not liable for their expenses.
In most states, you can sign up for a “Landlord Agreement Account” with the utility companies that allows you to switch the accounts to the tenants and back, with less paperwork and expense.
As you move along feel free to send me more questions as they arise.
Your (self-appointed) personal rental-home consultant,
Terry
Letter on Selecting Tenants
Tags: damage deposit, Terry Sprouse, turn your home into a rental house, who pays utilities
Posted in All Things Real Estate, do it yourself, due diligence, finding tenants, fixer upper houses, how I got started in fixer uppers, how to make money renting housing, How to manage tenants, how to start a real estate business, How to start your own house fix up and rental busines, learn to invest in real estate, tenants, turn your house into a rental | 1 Comment »
Thursday, August 26th, 2010
I was interviewed by the engaging, master radio host, Ron Ross of WJBC 1230 AM in Bloomington, Illinois this morning.
I talked about how to turn a home into a rental property, including:
- how to do the financing
- getting good tenants
- taking advantage of tax breaks
- and preparing the old house to rent.
Before the show I heard Ron going through the news and he said that ratings were so bad at CBS that Katie Couric was showing up to work in sweat pants, a tank top and a ball cap too.
So, during the interview, I mentioned that one of the advantages of working with rental properties was, like Katie Couric, I can show up to work in sweat pants and a ball cap.
Listen to the entire radio interview.
Upcoming radio interviews
September 2 at 7:40 am, Good Morning Rochester with Rich Peterson, KROC 1340 AM, Rochester, Minnesota.
September 2 at 11:25 am, John Brown’s Mindset, KTRS 550 AM, St. Louis, Missouri.
September 15 at 8:05 am, the Dan and Mike Show with Dan Ramey, WBEX 1490 AM, Chillicothe, Ohio.
Tags: radio interview, turn your house into a rental
Posted in create wealth in real estate, fixer upper book, fixer upper houses, fixer uppers, fixer-upper business, fixing rental houses, home buying, home foreclosures, how I got started in fixer uppers, how to make money renting housing, How to manage tenants, interviews, invest real estate repai and sell or rent, investing in your spare time, investment house, investment property, investments, investmet properties, landlording, learn repair skills, maximize rental profits, radio interviews, real estat investing, rental houses, rental property, turn your house into a rental | No Comments »
Tuesday, February 2nd, 2010
Avoid this guy as a tenant
(more…)
Tags: bad tenants, being a landlord, fix em up class, handling tenants, landlord, managing tenants, tenants
Posted in fixer upper houses, fixer-upper business, fixing rental houses, how to make money renting housing, How to manage tenants, how to start a real estate business, How to start your own house fix up and rental busines, landlording, legal information, managing apartments, managing tenants, rental property, tenants, turn my home into a rental | 5 Comments »
Tuesday, December 1st, 2009
My new audio course entitled “Fixer Upper and Rental House Start Up Kit” is now available!
It’s specifically designed for the beginning investor who wants to learn through the convenience of listening to audio recordings. I start from the beginning and guide you through all you need to know to get started.
Audio #1 is Start Your Own Fix Up and Rental Business
This recording takes you though the steps you need to know to get going including identifying target neighborhoods, doing due diligence, paying for rental properties, how to do taxes.
Audio #2 is How to Manage Tenants and Enjoy It
Tenant issues are what detour many people from this business, but follow the time tested techniques that I use and you will find that managing tenants is a lot easier than you thought.
Audio #3 is How to Learn to Make Repairs
I did not start this business with many repair skills. But I learned as I went along, and you can too.
#4 Documents and Contracts
This includes the nuts and bolts you will need to run your business. You receive a form to screen tenants, application forms for tenants, eviction notices, sample letters to tenants, tables that allow you to calculate how much your monthly payments will be when purchasing a house, and much more. These are the forms that I use in my own business.
The Start Up Course includes a 14-page workbook that I have written to further guide you along the way to starting your business.
And for a limited time, I am offering a bonus download with an electronic copy of my award-winning book “Fix em Up, Rent em Out.”
Subscribe in a reader
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Tags: Fix em Up Rent em Out
Posted in CD course, fixer upper houses, How to manage tenants, How to start your own house fix up and rental busines, learn to make repairs, Terry Sprouse | No Comments »
