Pay Day

Today was one of those days, we landlords love.  Just sit at the desk and write out receipts for rent payments all day long....  Ask about the family, shove them out the door, and cheerfully say , "see you next month".  Run by the bank and head for home.

Yep, I like landlording!!

Pride and Prejudice.

I would like to think that the property that I rent out is above the average rental property in the area.  I take great pride in having the cleanest rental units available. I try not to fall into the trap of fixing it up as if I were going to live there.  But I do have standards.  During the final walk through;  I like to be able to say that I could live in this unit. Some of the things that I strive for in my rental units are:

1. Good water pressure in kitchen and bath.
2. Handrails where needed.
3. Woodwork and trim all in place and nailed down securely.
4. Safe.
5. Curb appeal. (Oh right, I got to get that TV off the table in the front yard.)
6. Windows washed.
7. Carpets clean.
8. Cabinets wiped out.
9. No leaky ceilings.
10. Furnace checked out.

I could say a lot more about this.....

Returned Check

I received notice from my bank today of a returned check from one of the tenants.  The bank charged me a $5. fee for their hassle.  I should have done a better job of screening my tenants.   A returned check can happen to anybody once or twice.  However, I have been conditioned to equate bad check to bad person.  Now I have to deal with it; just as it is about time for them to pay next month's rent.   This is my policy on returned checks:

1. I will no longer accept checks from said bad person.
2. I will charge said bad person a $20. fee for the returned check.
3. I will not give said bad person their check back until they reinburse me in full for the check amount plus my $20. fee for dealing with it.

And that's all I've got to say about that......

I like being a landlord! Umh yeah I really do. I mean... I think I do.

I think that I like being a landlord.   That is what I keep telling myself as I write all of these stories.  Actually, I lied, I really bought my first property in 1977.  After tenants moved out leaving there every possession and a  load of dog doo  in the basement, I vowed never again would I be a landlord.  I still try not to scowl everytime I see the mother of the kids that left my property like they did and its been thirty years ago.  But I am getting off track, I am telling you the advantages of being a landlord.  Let's see there's:

1. Building equity.
2. Good Investment
3. Lots of tax deductions.
4. I am the boss of ME.
5. Set my own hours.
6. Something different every day.
7. Can stop in the middle of the day and do some shopping.
8. Landlording can be done any where.
9. No education required.
10. Can work full time or part time. 

I do like landlording!

Tenant Training

One day I had a prospective tenant tell me that she had heard, "that I write out the eviction notice the day that the lease is signed." Gee, to be that organized!  I don't bother to defend myself; afterall they know what they heard.  Over the years,  I have been called everything but a 'white woman'.  And I don't care, in fact I like it. I want to have a no nonsense reputation.   Don't waste the opportunity to instruct the tenants on what you expect of them.  Do it the day the lease is signed. 

1. Schedule a housekeeping and maintenance inspection within the first month of tenancy. 
2. Inform the tenant that you will be doing a drive-by to check on the property a couple of times during the first month of tenancy.
3. State what you expect of them clearly and firmly.
4. Don't let tenants get by with late payments.
5. Take care of your business or it will take care of you.

Just sayin'

Tenant Screening

The single most important job of  a landlord is  tenant screening.  So many problems can be avoided by putting the right tenant in a property.  Where do you start checking out the tenants?  The first thing is have a good application and then question every answer on it.

1. I rely heavily on past landlords.  They can answer questions about payment history, houskeeping, and problems.  A good question to always ask is:  Would you rent to them again?  I always get at least 2 landlords or the last 5 years of landlord history.  If they can not provide anyone but family, that's a red flag. 
2. I call the water department to see if they are current and how many times the water has been turned off or late paid in the last 12 months.   
3. I call the car insurance company.  It's the law you have to have insurancea on your vehicle.  If they do not have insurance there is another red flag. 
4. NEVER EVER work with them on the damage deposit. 
5. Pro- rate partial month's rent but do not prorate the first month.  Give them the credit on the 2nd month.
6. If they can not produce any one nor any business for a credit reference, you guessed it-  red flag.
7. Verify income by looking at a current pay check stub.
8. Verify all government payments thru bank statements, government letters, or by phone.
9. A quick phone call to the police department sometimes will give you a heads up on their life style.
10. Call other landlords to see if they recognize the name.

Even after doing all of this, you may still get tricked.  But you also may get a good one!

Happy Landlording!

Today's Surprise

Got a call last night.  The sewer clean-out pipe outside the bathroom window of one of the rent houses has sewage flowing out of it and piling up on  the yard.   I had the maintenance man call the eel service that I used last time.  His wife told him that her husband had died in April. Not so good.   So, I had the guys rent an eel to attempt a clean out themselves.  Ran 100 foot of eel into the pipe and still didn't get the pipe flowing.  Called JULIE to get any lines located in the yard and have a back hoe scheduled for tomorrow morning to dig out the  80 feet of clay pipe to be replaced with plastic pipe.  Probably will take all day tomorrow and $3000. to fix that little problem.  I don't like surprises anymore.

Dumpster Abuse

Clean-out required a 20 yd dumpster.  So, I had one brought in and  placed  in the front yard.  Let the clean-out begin.  We get busy and after a few days we get the bottom covered then its the week-end.  The garbage magically multiplies over the week-end.  Garbage bags with diapers, food, mail etc.  Why do people feel like they can put their garbage in my dumpster. It's STEALING!  They are not paying for it and yet they think that they can fill my dumpster.   I wouldn't mind a bag or two.  But 16 bags is a little excessive don't ya think?  So,  what do you do?  It's fairly easy to figure out whose garbage it is.  Just rip open a bag or two and their name will be on several pieces of mail. 

1. You can take the garbage back to them. 
2. You can also involve the police.  However, unless you/someone actually saw them put the garbage in your dumpster you won't have much of a case.
3. Just plan on other people using your dumpster when you rent one.
4. Wait until you are sure that you will fill the dumpster before getting one.  This may involve handling the garbage more than once.  Not good.

Just one more thing.

How Big Do You Want to Get?

How many houses are enough?  How big do you want to get?  Everyone must answer this question at some point in their careers.  I have had a secretary and a work crew of 4 or 5 guys.  And I have managed the whole thing myself with no maintenance or secretarial help at all.  I have  done both. So where am I today; somewhere in the middle.  1 or 2 maintenance guys with no secretarial help at the present time.  I like knowing everything that is going on.  I know every maintenance call, every phone call, every tenant call, I know every check that is written and every bill that is paid.  I am in control of the deposits.  I just like knowing what is going on.  So how big do you want to get?  Think about the quality of life that you want, the stress level you can handle. look at the pros and cons and decide for yourself.  Just a thought.

Good Business or Getting Even

Human nature has a great desire to get even.  When tenants leave owing money, leave the house destroyed, leave fleas, leave garbage.   Is there any recourse?  So far, you've taken them to court and received a judgement for the money they owe.   It's been a couple of years and you haven't seen any money.  You are beginning to  expect that you will never get paid. What can you do?  You just want them to feel some pain.  You are sure that it would make you feel beter.

OK here is what you do.  Contact the tenant by mail.  In your letter; tell them that you will be sending the  tenant a 1099 miscellaneous income form and that you will be reporting the amount to the IRS. This will result in additional income to them.   In your notice to them be sure to let them know that this reported  income  may  trigger the loss of any government benefits that they now receive.    The notice may get their attention enough that they make a payment to you.   Great!  But if it doesn't, go ahead and send out the 1099.

Keep a detailed list of how you came up with the figure reported on the 1099.  Be sure to include the amount that they owe, plus interest, plus damages, plus court costs, plus clean out fee, plus, plus....   Once you have reported your loss as income to the tenant, you have given up your right to receive any monies from the tenant.  But you have received some justice.  Is this revenge, getting even?  Naw, it's just good business.

Happy Landlording!

Friends

As a result of landlording and the dilemnas associated with said occupation; I have made so many new friends over the last few years.  I know the County judge and his secretary by first name.  The Chief of Police in 4 towns,  all the mayors and city secretarys in each town I do business in.  I've met the Summons Server Officer, the dog catcher, and members of the fire department.  The tax accessor and county treasurer.  Met several attorneys in and out of court.  I know building inspectors for the occupancy permits.  I know other landlords and their maintenance crews.  The guys that work for the electric companies,  the people that turn the water on and off.  the neighbors to each one of my properties.  My kids accuse me of knowing everyone and refuse to go to Wal-Mart with me because it takes so long to get out of the store.  The more people you know the easier to screen your tenants.  Many of these people will gladly give me a reference on prospective tenants.  At times that even prevents a problem for me.  Just think, if I hadn't had properties, I would have never met these fine people!

"It's not what you know but who you know".  I think that there is some merit to that phrase.

Hats

A landlord wears all kinds of hats.  Today I wore the interior decorator hat, the project manager hat, the secretary hat,  and the accountant hat.  The day started off with a trip to Wal-Mart.  Picking out some curtains for a living room and kitchen.  If you don't supply curtains oftimes the tenant will hang a sheet over the window.  I can't stand that; it looks tacky.  I swung by the apartment and put the curtains on the rods and hung them.  Switched to the project manager hat and  conferrred with the guys as to what they would work on for the rest of the day and early next week.  Made sure that they were mounting smoke and carbon monoxide detecters as they finish up.  Planned out a kitchen for the next project.  Then went to the office to receive rent payments. Made a few non-threatening phone calls to late payers. Encouraged them to tell me when to expect their payment and told them I would work with them and that their payment would need to include the late charge.  Received a few inquiries as to rentals available.  Responded to a maintenance call or two.  Entered the deposits into the computer and balanced the bank account.  Hence the secretary and accountant hats.  I took all those hats off and headed for home.  On the way home, I put the property manager hat on and showed an apartment.  Now, I am waiting up for past tenant to stop by to pick up her deposit refund.  Then the hats are off and I am off to bed.  Tomorrow it starts all over.

I like hats . I  wear a different one every day.  Lucky me!

Buying that First House

So you really want to be a landlord?

1. If you really, really like the property get an appraisal, and make your offer based on the appraisal.  The offer should be at least 20%, (30% is better..with today's market you may even be able to get it for 50%  all they can do is say no) less than the appraisal.   Many banks only want to lend 70% of appraised value on an investment property.
2. To get the best deal, you have to be willing to lose it.  Sometimes sellers call you back and accept your offer.
3. Start slow.  One house at a time.  Get that one up and working as quickly as you can and then think about your next one.
4. Look at empty houses if possible.  You never know what is being covered up by a well placed piece of furniture.
5. Make sure that you have cash available to cover the bank payment when your tenant does not make their payment to you.
6. Don't quit your real job yet.
7. Put together a team of people to help you.  Young attorney, insurance agent, appraiser, home inspector, banker.
8. Fix the important stuff in the house first i.e.  electrical, plumbing, bathroom, kitchen.
9. You are not going to live there.  Fix  the property for durability.
10. Keep the color scheme neutral.