6 Not So Obvious Tips From Experienced Landlords
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 about real estate investing. If you’re watching me on YouTube and you liked what you saw, give us a thumbs up and don’t forget to subscribe to our channel so you can get the next video as soon as it’s out. If you’re watching me on Facebook don’t forget to like and share for BiggerPockets this is Mindy Jensen, signing off..
As found on Youtube