Archive for the ‘places to advertise for a tenant’ Category

The 5 Rules on How to Lose Money and Get Your Rental Property Trashed by Tenants

Friday, August 10th, 2012

The 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.”

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Funniest Tenant Screening Stories

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

Creepy tenants and landlord/tenant rights

Tuesday, August 24th, 2010

Gary Sutton of Newsradio 910 WSBA, York, PA asked me, “What if you have a creepy tenant like the one in the movie Pacific Heights?  What are the rights of tenants?

Michael Keaton in Pacific Heights represented a new landlord’s worst nightmare. He was a master at manipulation of landlords, and pushed the boundaries of the law without actually breaking them.

Laws Favor Tenants

Of course, there is a lot of gratuitous Tinseltown nail-bitting tension in the film, but it does faithfully present one fact that all landlords must face. The laws generally favor the tenant.

Laws may vary from state to state, but in general tenants are required to:

– maintain dewlling units
-dispose of trash
-use in a reasonable manner the electrical , plumbing, heating, AC,
etc., and all appliances
– not destroy, deface, or damage the premises
– not disturb the beighbor
– allow landlord access to the property

Landlords are required to:

-supply a written copy of the lease to the tenants
– comply with all building codes
– make requied repairs so that the property is clean and safe
– maintain in safe working order all electrical plumbing, AC, etc.
– provide recepticles for waste removal

“Practical” vs “Legal” Remedies

As Carlton Casler points out in his book “Arizona Landlord’s Deskbook,” the best remedy to problems with tenants is often by utilizing the “practical” approach rather than the “legal” approach.

For example, instead of incurring all the costs of time and money to legally remove a deadbeat tenant, by telling the tenant that if he is out at the end of the month and the property is reasonably clean that you will refund allow his deposits. Or, if he has no deposits, you give him $100.

Would that solution work for a tenant like Michael Keaton?

He’d probably prefer a fist fight with the landlord or a shootout with the cops.

However, outside of Hollywood the practical solution works pretty well.

Upcoming radio interviews

August 25 at 8:08 am, I will be on Jeff Anderson’s show, KSDR 1480 am, Watertown, South Dakota.

August 26 at 11:05 am, the Ron Ross Show, WJBC 1230 am, Bloomington, Illinois.

September 15 at 8:05 am, the Dan Ramey show, WBEX 1490 AM, Chillicothe, Ohio.

How to Find Tenants

Thursday, April 8th, 2010


Here is a recent email that I received from someone who is taking my 7-Week email course, and my response:

Dear Terry,

We bought one fixer upper but are having trouble renting it — any ideas of good places to advertise for a tenant?

Thanks in advance,

Jean xxxx

Hi Jean,

Let me suggest a few techniques that that have worked for me:

1. Place several small For Rent signs on all nearby streets, especially the major intersections. If you get a sign with an arrow on it, you can point the arrow in the direction of your house. I buy the signs at Home Depot or Lowe’s.
2. Hold an “open house” on Saturday and Sunday. People driving by can come in and look around.
3. Contact companies that help people find rental properties. Some will list your property for free. These companies usually contact me.
4. Run an ad on craigslist.org. You can upload photos and describe the qualities of your rental property. The ads are free & I usually get a great response.

I hope you find a tenant soon.

Let me know if you come up with a good technique that I haven’t thought of.

Good luck!

Best regards,

Terry Sprouse

Location, Location, …

One thing I didn’t mention in the letter, but which is perhaps the most important consideration of all in attracting good tenants, is the location of your property. Properties located where people really like to rent are called “opportunity zones” (or “transition zones”).  Just as Baskin-Robbins must offer the flavors of ice cream that the public likes, so you must offer rental properties in the areas of town where people want to live.

If your property is located in an area where people don’t like to rent, you will always have trouble finding tenants. For more information about my philosophy on where to invest, check out my EzineArticles.com article The Secret to Increasing Cash Flow – Invest in Opportunity Zones .