Anybody own rental property?

[jkust]

Hi all, I'm going to possibly be purchasing a rental property this week. The current renters are month to month with no rental/lease agreement in place. I will either need to have them gone by the time I close or figure out how to deal with them. Some months they don't pay their rent at all and the owner lets it slide and let's them off the hook from paying back rent so they end up living for free some months. They aren't renters I want to deal with. Where do you go to get your lease agreement documents? What do you have to do to get bad renters out given there is no lease in place? Do you charge extra for pets?...these people, I am understanding, will not want to go willingly given their cushy/squish rent situation they have paying too little rent when they do pay at all.

 

[MTboatguy]

You can get rental and lease agreements that fit the law in the area that the rental is located in, many places have them online to download, so you want to make sure you know what you can and cannot do, as well as what your obligations are and and are not, it can be a satisfying experience or a exercise in utter frustration owning rentals these days. I finally sold all of mine, I am getting to old to deal with all that crap and I did not want to hire a management service. One thing I would do right now, if you know you are going to purchase it, notify the current renters you are going to require a lease or rental agreement with them the day you take ownership of the property and that the agreement will stipulate pay dates as well as fees and penalties that will be assessed if payment is not made in a timely manner every single month so you have given them fair notice things will be changing. Based on the little you have posted it sounds like you might have some dead beat renters. Sometimes it is beneficial to have the current owner break the news to them also make sure make sure your purchase paperwork stipulates that the previous owner will be liable for any damages to the property by the current tenets if they get mad and decide to trash the place.

 

[keith2k455]

I would honestly hope you are getting a great deal. If possible, I would make your offer to purchase the place vacant. If you have to evict, you will shoulder all the expense and lack of rent income through the process. You will also have to pay for all repairs and fees to get the place rentable.

 

[gm280]

jkust, You really REALLY need to seriously read and understand just how to deal with renters! For starters, you can't simply kick them out for not paying rent. If you try that, YOU will be in court and fined and paying more then the rent would even come too. Secondly, if they refuse to pay, you have to wait months AND go through court paperwork first before you can get rid of them. Laws lean towards the deadbeat renters it seems. I looked into doing that and after seriously understanding everything, I decided it wasn't for me. I value my time way more then that. However, I would do a walk through with a video camera with the perspective renters and make certain they are in the video and video every room and its condition and state that the rental property was in said condition when starting to rent. And then keep a copy with their signature to verify they knew the condition of the property. Because a can guarantee you, however the place looks when they move out, they will state it was that way when they moved in. And that won't be anything like you have on tape or file... Wish you well.... JMHO!

 

[bruceb58]

I have one long term rental property. My advice to you is talk to a company in your area that handles evictions and get their advice.

In California, once they are in for a certain amount of time, you have to give a 60 day notice but it all depends on the laws in your state or local jurisdiction.

I made the big mistake of letting my renters slide a few times with late rent and I paid the price for awhile with them always being late after that. To be a landlord and get rent on time, you have to be consistent. Once they know you mean business and can back up your words with a 3 day pay or quit notice(depends on your laws), you will be way better off.

Do you know what sort of security deposit is currently being held by the owner? You need to make sure that transfers to you when you purchase the house.

 

[Brian 26]

I use to own an apartment in your home state, Edina specifically, I do not anymore. It's just not in my nature to deal with other people's problems so I sold it.

Where do you go to get your lease agreement documents?

I have family in the business so I used a lease they had - sorry I know that doesn't help you. I probably have a copy of one somewhere if you need it.

What do you have to do to get bad renters out given there is no lease in place?

I luckily never had to deal with a formal eviction, I had bad renters but was able to get them to leave by talking through the situation. Basically - please leave on your own accord or I will have to evict you. I can tell you this, in MN the renters hold most of the cards, some see you as the big bad guy trying to throw the single mom out in the cold. One of the many reasons I got out, every land lord has stories they can tell. I have plenty, and I only owned a small building in an expensive area for a 8 years. This thread may turn in to "let's hear you tenant horror stories" which could be fun.

Those current tenants with no lease have a lot of rights, and maybe they should, but a lot abuse those rights.

Do you charge extra for pets?

Yes, $50-$100 more per month and a larger security deposit, I did not allow pets, I would recommend the same.

 

[aspeck]

No pets, period, in my rentals. And no smoking either. You can pick up leases on line specific to your state. Bad renters are a nightmare. I was out 10k from one renter till I had her removed by the law. Major damage that I had to eat because she had no money or assets. Because of that, I would have in sales agreement that all renters are vacated before you take ownership. I would rather have one of my units sit empty than have a bad tenant in them. Be as picky as the law will allow in renting your property.

 

[southkogs]

I've done a couple of different things: I did actually use my current residence as a rental while we lived out of state. I had two different renters in, and they did pretty well. My home rented as an executive home which was helpful to get a better "grade" of renter - though, that's not always a guarantee.

I also used a management company for a while. That had it's pluses and minuses. On the plus side, they were great for finding and screening renters. On the minus side, they cost a little too much for day-to-day operations.

I've also worked in the apartment industry, managing other people's properties. One recommendation - get REAL familiar with eviction laws in the area you're going to own property in. We've got somewhat reasonable laws down here and it takes a minimum of 90 days to evict someone.

 

[jkust]

Thanks for the feedback all. The tack I think I will take is to ensure that the current renters vacate prior to closing should we buy it and I will go through the formal process of screening new potential renters.

 

[MTboatguy]

When I had my rentals, one thing I did use an agency for was to run credit checks on my prospective renters, you would be amazed at what it can tell you about their ability to pay their rent on time.

 

[jkust]

When I had my rentals, one thing I did use an agency for was to run credit checks on my prospective renters, you would be amazed at what it can tell you about their ability to pay their rent on time.

Thanks...It looks like the major credit agencies offer tenant background checks for a reasonable cost. The offer to buy the property is in and I'm awaiting the response. Current renters will be required to vacate by close should the deal happen.

 

[bruceb58]

Besides a credit check, do a criminal check if you can. Friends of mine rented their house and found out, after the fact, the guy was recently convicted of meth possession.

 

[jkust]

Besides a credit check, do a criminal check if you can. Friends of mine rented their house and found out, after the fact, the guy was recently convicted of meth possession.

Good suggestion...researching the laws here...there are forfeiture laws of your real estate should your renter be caught with over a certain dollar amount of drugs in your rental house. There is a bit more to it but imagine your property being seized by the state because of a renter. There is a 50 plus page booklet on being a landlord and a renter that spells out the technicalities of dealing with late rent, max interest rate for late rent penalties, evictions, etc put out by the state and that little paragraph jumped out.

 

[gm280]

Good suggestion...researching the laws here...there are forfeiture laws of your real estate should your renter be caught with over a certain dollar amount of drugs in your rental house. There is a bit more to it but imagine your property being seized by the state because of a renter. There is a 50 plus page booklet on being a landlord and a renter that spells out the technicalities of dealing with late rent, max interest rate for late rent penalties, evictions, etc put out by the state and that little paragraph jumped out.

I have to say YOU have more guts then I. After seeing what SOME folks can and have done to your rental home, I just wouldn't want to deal with such things in my simple life... But to each their own!

 

[jkust]

I have to say YOU have more guts then I. After seeing what SOME folks can and have done to your rental home, I just wouldn't want to deal with such things in my simple life... But to each their own!

There is a method to the madness...in this case it's the 'L' word...location.

 

[bruceb58]

I have to say YOU have more guts then I. After seeing what SOME folks can and have done to your rental home, I just wouldn't want to deal with such things in my simple life... But to each their own!

I have been renting my rental house for 26 years. It is completely paid off, been positive cash flow the entire time and all the rent I collect now minus some other expenses goes into my bank account. Yes, it is worth it.

 

[eavega]

I've been a "reluctant landlord" for 7 years now due to a poor housing market and relocation for a new job. In that time I have had to evict one tenant. The lesson learned there was that you don't "give them a break". In the end, a rental property is a business, not a personal relationship. The bank is not going to sympathize with me if I don't pay the mortgage on that house for any reason. I learned a lesson from another landlord while we were both waiting for our turn before a judge to get a court order for a tenant to quit the property; I had been going around and around with my tenant for 4 months. This guy next to me, his tenant was two weeks late with the rent. He told me you NEVER hesitate, you get everything filed as quick as possible. You negotiate from a position of strength if you already have a court order in hand. You are in a position of weakness if the tenant owes you money and is still living in the house.

Just sharing my one lesson as a landlord.

-E

 

[bruceb58]

Just sharing my one lesson as a landlord.

That's good lesson. After being lenient with my current renters, it has taken me a year to get them back inline. What is crazy is that my tenant works for a property management firm that gets to deal with late paying tenants all the time

 

[RGrew176]

I once did the rental thing and it was such a hassle I don't think I will do it again. Good luck, and I think that getting the present tenants out before closing is a smart move on your part. That way, like you said you can screen the new tenants yourself and you are not stuck with any leftovers from the previous owner.

 

[jkust]

I once did the rental thing and it was such a hassle I don't think I will do it again. Good luck, and I think that getting the present tenants out before closing is a smart move on your part. That way, like you said you can screen the new tenants yourself and you are not stuck with any leftovers from the previous owner.

It will be a new experience for us but one I have had in the back of my mind for years. I've never rented personally before and so it surprises me the extent of the invasiveness of the question that are on the rental applications I'm researching online. I'm happy to see that those questions are just standard. The current renters are extraordinarily bad housekeepers (that is as nice as I can put it) who have brought in multiple large dogs and they smoke as well having taken advantage of the kindness of the owner.