Experienced real estate investors are
experienced because they've lived
through it - the good and the bad. But why
attend the school of hard knocks if you
could just learn from somebody else's
mistakes instead?
My name is Mindy Jensen and I'm the
Community Manager here at BiggerPockets.com
today I've got six
not-so-obvious tips from experienced
landlords to help minimize your pain
when you get started.
Number one: Payment - Upfront rent can seem
like this great and awesome thing. You
collect a big wad of money upfront,
you don't have to worry about your
tenants paying on time because they've
already paid. Except what do your
state's landlord-tenant laws say about
collecting up front rent? Some states
limit the amount you can collect up
front. Other states require you to pay
interest on it if you don't know you
need to find out. Another thing to
consider is your tenants motivation for
paying upfront. Why do they have this giant
wad of cash sitting around right now?
Could it be that they came into some
money and they know they'll spend it, so they
want to pay the rent upfront? What
happens when all their upfront rent is gone?
Chances are good all the rest of the
money is going to be gone too
and then you're going to be chasing a
tenant who can't afford your rent.
Another thing to think about is maybe
they're trying to avoid contact with
their landlord for nefarious purposes
such as growing pot or making meth.
Maybe their intent isn't quite so
nefarious, but they still don't want you
to come around.
Perhaps they're renting it out on Airbnb.
Of course, there are exceptions to every rule
perhaps if you're offering student
housing the parents wish to pay the
entire expense upfront. Tip number two -
tenant screening sneaks. Mr. Brandon
Turner wrote an article called "Tenant
Screening the Ultimate Guide" and that
gives you a really great foundation for
your tenant screening but I picked up a
few extra tips from the geniuses in our
forms. Walk them out to their car. Take a
peek inside. If their car is strewn stem
to stern with garbage and crap your
rental property is most likely going to
be treated the exact same way. Ask them how
many animals they have, don't ask them if
they have animals because they can say
no to that.
Asking them how many animals they have
tells them you already know they have
animals and you just want to know how
many. Do not accept people who have
animals that will live somewhere else.
That animal is only going to live
someplace else until they move in. Number
three - advertising your rental.
Unfortunately, Craigslist is rife with
scammers and a common scam is for
someone to take your legitimate listing
and take your pictures and use it in
their own scam listing. They use their
phone number, your address and their
contact information so they get all the
phone calls. Commonly they will tell the
potential tenants that they are out of
the country and can't get the keys to
them, but you should hire or the tenant
should hire a locksmith to come in and
change the locks for them.
The scammer collects the rent money,
collects the deposit, and then leaves. You
are trying to rent your house and all
the sudden there's somebody living in
there. So how do you keep somebody from
stealing your listing? Well, you watermark
your images with your phone number and
your contact information. They're not
going to waste their time trying to
erase your information from an image,
they'll just go find another listing that doesn't
have these marks. Another tip - never
publish the actual address of your home.
Publish the nearest cross streets. Cross
streets give people a good indication of
where the property is located and then
they can decide if they want to
investigate further. Tip number four -
Leases. You need a good solid lease. That
bare bones lease that you found online
is completely worthless and it gives you
absolutely zero protection. Your lease
can't contradict your state's landlord-
tenant laws so you need to make sure you
follow those, too. But there are plenty of
instances that landlord-tenant laws do
not cover such as: smoking, pets, parking,
painting the interior of the home. If you
want your tenants to know, you need to put
it in your lease. Once you have your nice
long attorney approved lease, make time
to sit down with your tenant and go
through the entire thing.
Don't assume they're going to read it
all. Read it to them, in fact,
put a line in front of every paragraph
and have them initial as you read it to
them, so that later they can't come back
and say, "Oh, I didn't know." It's in the
lease and I told you.
Tip number five - tenant communication. Can
you read minds? I can't. Your tenants can't
either.
if you want them to know something you
have to tell them. The best way to tell
them is in writing. As of right now, in
the state of Colorado, which is where i'm
licensed, texting is not currently
recognized as a legal method of
notification. But you know what is? Email.
And you know a recognized method of legal
notification in all 50 states plus DC? U.S.
Post. If you want you to know something
you have to tell them. Putting it in
writing is best because then there's no
room for interpretation.
Tip number six - Record-keeping. Most of
the time your tenant communications will
be smooth sailing
that's because you have screened your
tenant properly, but just to make sure,
get yourself a notebook during
back-to-school times they're like ten
cents each. Get a notebook and make that
solely for keeping communication records
with your tenant. Whenever they pay rent
write it down. If they pay rent on time
you want to establish a clear complete
record keeping track. Mark down when they
have made a repair request and mark down
when it was completed.
Why? Because you want to be able to prove
that you keep good records anything that
goes on between you and your tenant
needs to be written down no matter how
small.
When the tenancy ends, if nothing ever
happened,
you just throw the notebook away. If you
ever need to prove anything
you're going to thank yourself for
having complete records. When it comes to
landlording there is absolutely no
reason to reinvent the wheel. With more
than 675,000 members BiggerPockets.com
is the place for you to learn
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this is Mindy Jensen, signing off.