(Closed) 1st time landlord – need advice & tips

posted 7 years ago in Home
Post # 3
Member
2562 posts
Sugar bee
  • Wedding: July 2010

@MrsStepHanson: My parents have rented out properties for almost 20 years. This it the advice I gleaned from them: Never rent to the first person who calls, especially if the call the second the ad comes out – it reeks of desperation, and you never want to rent to a desperate tenant. Try to find a tenant that will stay a while, so they don’t rent to students, they prefer renting to families, with kids, and pets. They have never had any of their properties damaged by pets, and because pet owners have a harder time finding rentals, they stay longer. They only do month to month rentals, with a semi-annual inspection (every 6 months) to identify any maintenance and repairs to be done. Don’t ever rent to anyone without at least 2 references (one previous landlord, and one employer). Those are the main ones I can think of for now!

Post # 4
Member
7082 posts
Busy Beekeeper
  • Wedding: July 2009

We are first time landlords too.  We have hired someone to be our property manager, which will help us from getting bugged about every little thing.

Post # 5
Member
751 posts
Busy bee
  • Wedding: May 2010

My husband and I own a 6 unit apartment building.  We live in one unit and rent out the rest.  I agree with most of what MsMini said, but we don’t allow pets because of previous experience with bad tenants.  Follow your gut when you meet potential tenants,  every tenant we had a good feeling about has been awesome.  The ones we weren’t sure about turned out to have bad credit or questionable references and we were happy in the end that we listened to our guts that something was “off”.  It helps to really LIKE your tenants too, but that isn’t necessary.  Definitely check credit and references – unfortunately neither are guarantees that you won’t get screwed, but they are good indicators.  

Do a thorough inspection when your tenants move in.  When I did my first one with my husband I thought he was nuts because I had never seen a list like his of things he wanted his tenants to check (and had never had so thorough an inspection at any place I had ever lived) but his checklists have saved us time and money when tenants move out or in. 

When your tenant has an issue – and they will – fix it fast and with good humor.  Yes, getting a call about a broken toilet in the middle of your Saturday sucks, but it’s your job and keeping your tenants happy is important since a happy tenant stays longer and takes better care of the place. 

Also, know the laws in your area.  We live in Santa Monica, CA which has a ton of laws, many of which really protect the renters, not the landlords. 

Good luck and don’t be scared!  It can be really fun and is a great investment.  We jokingly refer to our building as our retirement account since if we pay off the mortgage the income from rents will be equivalent to what we make in a year.  And we’ve learned so much about home repairs.  I can replace a faucet in 25 minutes and build you a simple electrical outlet from scratch 🙂 

Post # 6
Member
2589 posts
Sugar bee
  • Wedding: February 2014

Be nice to your tenants. Our landlord’s kind of a dick. We live in a very crime-heavy part of town and our apartment had only crappy latch-style locks on the doors when we moved in. Not secure at all…We had to pay to have deadbolts installed ourselves and he would not help or reimburse us…so, we’re taking those suckers with us when we move out, because they’re ours. ;P

Ditto on fixing issues FAST. And be sure to keep up-to-date on safety/health codes, too.

Post # 7
Member
1701 posts
Bumble bee
  • Wedding: October 2010

I can’t sell my house in Cleveland, so I am a first time and very reluctant landlord.  Currently my friend’s cousin is renting my house.  I had to evict him in August, although he came up with the money at the 11th hour.  I terminated his lease for the end of September.  he probably won’t leave on his own so I will probably have to go through the process again.  And this is someone I know.  I will be MUCH smarter about the next tenant.  I am very jealous of ladyox’s good experience!

Lessons learned–get a rock solid lease from a lawyer, make sure you have a very steep fine and daily late charges if their rent is late, never give an inch about collecting those fees and as everyone else noted, be ultra careful about who you rent to.  If you have good tenants, there will never be a reason to charge those fees.  If they are bad tenants, you’ll need the cash for attorney fees.

Post # 8
Member
3344 posts
Sugar bee
  • Wedding: August 2010

Take pictures of the house (inside and out) before the tenant moves in!

Post # 9
Member
1701 posts
Bumble bee
  • Wedding: October 2010

Here is a question for more experienced landlords–when you are looking at someone’s credit report, what do you consider to be warning signs and what is OK?

Post # 10
Member
14503 posts
Honey Beekeeper
  • Wedding: June 2011

I highly suggest taking a class on federal housing codes.  They are incredibly complicated and breaking one can cost you alot of money.  I worked in the rental business for awhile and was stunned at some of the rules.  I would also hire a company to do your credit runs for you, there are some out there especially for rentals.  You set the guidelines and they give you a score.  If that score is what you want than accepted.  They check criminal backgrounds, credit, and rental history.  You cannot rent to just families (familial status) like someone said, that is illegal.  There are those out there just looking for a landlord to break the rules and the consequences are astronomically high.  I can only reiterate, take a federal housing codes class.

Here is a copy of the Fair Housing Act:

http://www.justice.gov/crt/housing/title8.php

Post # 11
Member
714 posts
Busy bee
  • Wedding: October 2010

I’m a landlord and here’s what I would tell you:

1.  Never, ever, ever let anyone move in without at least a one month’s security deposit and a signed lease.  If they have pets, charge an extra pet deposit.  Make sure your tenants understand that the security deposit is NOT the last months rent.

2.  Never, ever, ever let anyone in without first checking their previous landlord references, verifying their employment and income and running a credit check.

3.  Big red flags to watch out for – anyone that pushes to move in right away, anyone with a sob story.  I don’t mean to sound cold hearted and I realize good people fall on hard times but believe this – if you allow someone with problems to move in, their problems will become yours. 

4.  No tenant is always preferable to a bad tenant – wait for a good one. 

5.  All smokers will swear to you they never smoke in the house – most of them are lying. 

6.  When you get a good tenant, appreciate them and encourage them to stay!

7.  Use a realtor to market your house and run the credit checks rather than do it yourself – its worth the money and aggravation you’ll save yourself and you market to a wider and better rental pool.

8.  Listen to your gut when it comes to deciding on a renter.  If you don’t feel good about them or someting seems off, move on!

Good luck!

Post # 12
Member
714 posts
Busy bee
  • Wedding: October 2010

@Georgia Bee:  When i look at a credit report, I look at their overall scores (should be at least in the 700 range but the higher the better) and if they pay ALL their bills on time consistently.  If they do, that’s a great sign – if they don’t or have a spotty history, I won’t rent to them.  I also look at their debt load in relation to their income – if its too high, I pass. 

However, one thing I won’t hold against someone right now are people whose houses went into foreclosure.  There are a lot of those people out there right now due to the housing bubble burst.  If everything else checks out okay and I have a good feeling about them, a previous foreclosure isn’t something I worry about.

Post # 13
Member
3762 posts
Honey bee
  • Wedding: May 2010

Just a tip, in our town (college town) the city actually provides free tenant/landlord third party mediator sessions. 

My apartment had a leak and the carpet got wet and was really old anyway.  The building already had problems with mold so I wanted my carpet replaced asap.  The landlord wanted to make sure the leak was fixed completely before putting in new carpet.  I simply asked (in writing) if they would attend a session with the city.  They chose to replace the carpet instead.

Post # 14
Member
11327 posts
Sugar Beekeeper
  • Wedding: February 2011

i agree x 10 with what people say about fixing things fast and with good humor. In my last place I was renting half a duplex and the landlord lived on the other half. He was a super super nice guy and was always sooo nice about fixing things that broke. And a LOT of stuff broke because it was a 100+ year old house. The door fell off. The (only) toilet broke. The sink stopped working. The door fell off. The CEILING COLLAPSED. Onto my (then bf/now)FI. If my landlord had been a jerk, or had been unresponsive, or had been slow, I probably wouldn’t have stayed as long as I did. And I certainly wouldn’t be as nice as I was about all the stuff that broke. And I probably would’ve started some shit about a ceiling collapsing on top of my bf! But he was so nice about everything I really had no interest in causing him issues, I just wanted stuff to be fixed and go about my life. 

Post # 15
Member
1184 posts
Bumble bee
  • Wedding: August 2011

i agree with everything lisa105 pointed out, with the exception of #7 (using a realtor). this is probably somewhat location-specific though….we have a condo that we rent out in new york where craigslist is so prevalent for real estate that we have never had a problem getting plenty of candidates through that.

also, if someone’s credit score isn’t as high as you’d like, or it seems questionable to you whether their income is high enough to cover the rent, consider allowing them to have a guarantor (someone with a higher credit score/higher income who co-signs with the tenant and is legally on the hook for any unpaid rent).

Post # 16
Member
751 posts
Busy bee
  • Wedding: May 2010

We use a service for credit checks too and (fingers crossed) have never had a problem.   Of course the higher the score the better, but we have rented to tenants with lower scores who were employed long-term or had guarantors.  We also are wary of renting to students just because they likely won’t stay as long and we want long term tenants, but we will rent to students if they are from the area – meaning that they aren’t going to “go home” for the summer between semesters and are likely to stay. 

@lisa105 – agreed the no tenant is better than a bad tenant.  We will always leave a unit empty before we rent to someone we are unsure about. 

I have heard horror stories of people who have had to go through the eviction process, so a lot of people would recommend hiring a property manager, they really earn their keep when things go wrong.  If we didn’t live in the same building as our tenants, we would totally have one, so if your rental property is far from you this is something to consider. 

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