Archive for the ‘rental houses’ Category

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

Silent Wealth Generation with Rental Properties

Thursday, January 12th, 2012

When you own a rental property, two silent forces at work to increase your wealth:

1.) principal reduction, and

2.) increasing equity.

With each mortgage payment, you decrease the amount that you owe on a home loan as you reduce your principal. When your property is rented out, your tenant pays your loan for you. At the same time, equity goes up as property values appreciate over time.

Let’s assume that the original mortgage (loan) for a property is $150,000, which is also the original value of the house. As time goes by, the value of the house may increase to $300,000, due to appreciation. At the same time, the amount owed on the mortgage is reduced to $20,000, due to the mortgage being gradually paid down. At this point, the amount of equity (or value) that you have in the house would be $280,000.

If we don’t allow periodic dramatic rises and falls in home values to shake our confidence, we can count on steady, long-term, profits from our investment properties.

Carve Out Your Niche” Radio Interview Tomorrow

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How Take Care of Tenants for the Holidays

Thursday, December 15th, 2011

How should your treat tenants? Treat tenants the way that you would like to be treated.

Think about it, at some point we have probably all been tenants. When I was a tenant, I wanted the landlord to respond to my problems around the house, I didn’t want rate increases, and I wanted to feel that the place that I was renting was my home.

Most tenants are just like you and I, and they deserve our utmost respect, especially over the holidays.

Here are my 4 key tips on how to keep good tenants

1. Practice good communication

The desires of most tenants are fairly common, and easy to identify. Good tenants don’t like noisy neighbors, appliances or other items in their rental property that don’t work, and frequent rent increases. Fortunately, good communication can take care of most of these problems.

One great pet peeve of tenants is when they have landlords who are as slow as snails to respond to their needs. Does it take you 2 hours to watch the television show “60 Minutes”? Then maybe you’re too slow.

If you are slow to respond to your tenant requests for help, you will be perceived as uncaring. The reason for this perception is because you don’t have good communications with your tenants.

Any time a tenant calls me, I will almost immediately return their call. Even though I work a regular 8:00 to 5:00 job, I can still manage my rental house business by having my cell phone with me everywhere I go. This way, I can deal quickly with tenant issues that may become exponentially worse (like a broken water pipe), if I waited to deal with it until I got home from work.

A phone call is good when you need to quickly get in contact with your tenant, but if it’s not an urgent matter, my preferred means of communication with tenants is by sending them memos by regular mail.

For example, if the tenant is not keeping up the yard work around their rental property, I will write them a note in a calm and respectful manner identifying the problem. I make a reference to the section of the contract that requires them to keep up the yard, and asking them to take care of it. A phone call could easily turn into a heated conversation, but with a memo, the tone stays calm and the point gets made. And, I have a written record of what I have told them that I keep in the tenants file folder.

I keep our tenants informed about activities that I have planned for their property. I will send a memo out and let them know well ahead of time if I plan to do some preventative maintenance, on the roof, for example. If a plumber cancels an appointment, I’ll call them so they are not waiting around all afternoon for no reason. It’s really just practicing common courtesy.

2. Timely responses to repair requests

I’ll admit that when I first became a landlord in 2002, this was a low priority on my list. I used to cringe when I’d answer the phone and a tenant would be on the line with a repair request. I knew I was going to have to spend some of my valuable time and hard-earned money to deal with a maintenance request. I would sometimes let the repair linger instead of jumping right on it.

Now, I look at it as an opportunity to show the tenants that I take their problems seriously, and I respond to their concerns immediately. I have a busy schedule, but my tenants have busy schedules too.

Keeping my good tenants happy is my highest priority because it directly affects my profits. The less turnover I have in my properties the more money I make.

What has helped me to respond quickly is that I have accumulated a list of good repair professionals over time. I have plumbers, an air conditioner company, handymen, and other professionals that I trust, on the speed dial of my cell phone, so that I can get them working on a repair without delay.

3. Rental fee Increases

I know that many landlords feel the need to regularly raise tenant rental fees. For obvious reasons, this can stir up the resentment of tenants and may cause them to think about looking for a new property.

I don’t have this problem because the only time I raise rents are when one tenant moves out and another one moves in. My philosophy is, why give the tenants any reason to look for another place to live?

In the case of rent increases for extremely long-term tenants, I think that tenants don’t mind paying a fair and competitive price, as long as it doesn’t seem like an exorbitant increase to them.

4. Warm Their Holiday with a Gift (card)

I may have said this before, but it bears repeating, remember your tenants during the holiday. The holidays are a great time to build the relationship that you have with your tenants. I have established a holiday tradition of buying my tenants a gift card from Target.

Don’t be a Grinch, at the very least, send a nice card.

For more information on giving gift cart for tenants see:A Holiday Tip for Keeping Good Tenants

Are You Big Enough to Pay it Forward?

Increase profits by improving your rental property

Saturday, July 9th, 2011

I’d like to share with you an email that received from an insightful real estate investor who, I think, uses a great way to increase his rental profits.

Hi Terry;

I have been the landlord of a triplex for just over 5 years. For most of that time, I simply maintained the property that I owned after making a couple of bigger renovations (windows and insulation). The biggest challenge I had was that my existing tenants paid way below market rent and rent control would not allow me to increase rents beyond 0.7%-2.2% each year. I felt stuck.

Recently, one of those tenants moved out. I managed to gut and redo the one bedroom unit and once it was finished I rented it out for almost double what I was getting before! This took the pressure off quite a bit but I realized I had to get my other “long term” renter out of her apartment. I ended up paying her to leave (2 months free rent) but it looks like it paid off. Her rent for a 2 bedroom was $474.77, but I have a lease now on the apartment for $799 a month. Surprisingly, I got this tenant because they saw pictures of the first unit I did and knew that I was finishing the second unit the same way. When they did the walk through the place was gutted and I didn’t even have the walls framed in yet!

I have looked at some other systems out there, but it seems to me that the only one that really works is finding a run down property with below market rents in a good area, fixing it up, and rerenting to higher classed tenants. If I knew a few years back what I know now, I would get the old tenants out ASAP even if I need to use my “cash for keys” program.

Right now I work full time so I rely on a dependable contractor that I feel I can trust. I hope to start renovating my own houses down the road, but I think I might need to get rid of my job to free up the time. Currently, I just do a walk through each day to see what work has been done and simply manage the renovation. Once the triplex is completely turned around next month I figure I will start looking for another project; I just need to convince my wife who still has fresh memories of my less stellar tenants.

Anyway, wishing you all the best!

Jim Thrower

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William Nickerson Says “It’s Never Too Late to Start with Rental Houses”

Saturday, February 19th, 2011

You are never too old or too young to start investing in rental properties.

Take it from William Nickerson, author of How I Turned $1,000 into Three Million in Real Estate – In My Spare Time, who said,

“It is never too late to start, although fortune favors early starters. Each day of delay loads the dice against  maximum success. But I know of many successful owners who bought their first income property after retirement at sixty-five. You can always start later in life.”

Age is Relative

To put things into perspective:

Thomas Edison invented the telephone at age 84;

Benjamin Franklin helped in the writing of the United States Constitution when he was 81;

Frank Lloyd Wright designed the Marin County Civic Center in California at age 88, and;

I started buying rental properties as a mere child at age 47.

Too Much Work?

I have a friend who retired when he was 65, but he had to take a job at an Arby’s fast food restaurant to help make ends meet. I asked him, “Why didn’t you just buy a few rental properties before you retired?”

He replied, “It’s too much work.”

Too much work?

Which is more work, being trapped in a restaurant 8 hours a day doing menial labor, or having free time all day, and cashing rental checks once a month? Sure, there is some repair work every once in awhile, but you can hire a handyman to take care of that.

It’s Never Too Early Either

I’ve had young people ask me, “Is it too early to get started?” If you have the motivation and don’t mind learning as you go, there is no better time to build wealth and security than when you are in your 20’s. You don’t have to know everything to start.

I have a friend who got started at age 25. He bought a 4-plex apartment complex. He lived in one unit and rented out the others. He had a sharp learning curve in the beginning, starting off at an Elmer Fudd skill level, but after he had done it a year or so, he had his business operating like a Swiss watch.

Are you too young or too old?

It’s not about age. It’s about just getting started.

Calvin Coolidge said, “We cannot do everything at once, but we can do something at once. “

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5 Tips to Attract Tenants to Your Rental House Like Elepants to Peanut Butter(video)

Saturday, January 8th, 2011

In these 5 Steps you will master my secrets of how to drive tenants to your rental property. Learn which signs work best, where to advertise, and how to word ads and flyers so as to reduce unnecessary calls for information.

Hit a Holiday Home Run for Your Tenants

Wednesday, December 15th, 2010

Remember your tenants during the holidays with a gift card. This shows them that you are in it for more than the money.

When I was a Peace Corps Volunteer in Honduras, the people I worked with went out of their way to make me feel I welcome and cared for. I try to do the same with my tenants.

Be kind to your tenants and treat them the way you would like to be treated and they will return the favor by taking care of your property, and by providing you with financial security for years to come.

How to Prepare a New Rental House for Tenants (video)

Sunday, December 12th, 2010

Get your rental house ready for tenants by following my 5 steps.

I also recommend four of my favorite repair books for your real estate library to guide you through the process of repairing appliances, sinks, electrical outlets, and almost any other repair issue that you may encounter.

 

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Turn Your Home into a Rental Property (video)

Tuesday, November 23rd, 2010

What is the most powerful thing in the world?

An idea that has been planted in a person’s mind.

To improve your economic security you should plant in your mind the idea you should never sell a house. Converting your home to a rental house can provide long-term rental income and economic security to you and your family.

 

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LLCs vs insurance for protecting rental properties, redeux

Sunday, October 10th, 2010

I’m opening up the old mailbag and sharing a message that I recently received about operating a rental house business, and my response.

Hi Terry,

Thanks for writing those books – really enjoyed – and found your, ‘Never Sell Your House Book’, especially interesting and helpful.
We’re on our way to buying a new home (got a great deal on a home in a good area w/ a great interest rate ~4.4% w/ no points…), and we hope to rent our existing house out, as you suggest.
Rental comps in the area are ~$1,300/month, which would cover the new PITI…although, in my humble opinion, $1,300/month seems high – I can’t imagine people would spend that to rent…. but I guess they do. I think I would take less for low-maintenance renters.
I like your lease agreement forms in the Appendices.
Q: Would you suggest setting up the rental property as an LLC in order to CYA?
Jay Carson
Phoenix
———
Dear Jay,

Congratulations on the purchase of the new house. It’s good to hear that you were able to follow my advice and turn your old house into a rental instead of selling it.

In answer to your question on LLCs. Generally, LLCs do not provide an impenetrable  protective shield against lawsuits, contrary to those who  sell and over promote the benefits of these products.

It’s  like hiring Gary Coleman to be your bodyguard. You might have some protection from an assault, but probably not enough.

The best protection against lawsuits is a good insurance policy. If you have a good insurance policy and you are sued, your insurance company should defend you and pay for the damages if you lose the case.

(For a more comlete discussion of this topic see the earlier blog  article, Protecting Rental Properties: LLC vs. Insurance by lawyer  John Gravina.)

If you have any other questions, feel free to contact me again!

Best regards,
Terry
___
If anyone else would like send me with questions or comments, feel free to use the Contact Form on the “About Me” page of this blog.