The Landlord Thread

[zibazinski]

No rentals in Florida! Well, if he was in the coast guard, I'd have contacted his CO.  That doesn't go over well with the military folk.

[Bonny]

Jun 21, 2015 13:22:11 GMT -5 zibazinski said:

No rentals in Florida! Well, if he was in the coast guard, I'd have contacted his CO.  That doesn't go over well with the military folk.

Former. He does get some kind of payment from them.

He was last a physician's assistant. I think he probably got training as a medic in the CG and then financed a graduate degree in the field. I hate to say it but I suspect that somewhere along the line he's learned how manipulate the system.  Makes me mad because there are people who are truly disabled. This guy is just a lazy con artist.

[debthaven]

So the new tenant of the recently redone place gave her notice, she's leaving at the end of July. After only 4 months. 

She told the agent she loved the apt but she found a slightly bigger one for the same price next door, in a building that is better maintained. There are issues with our building, as I've mentioned before. The man who sold it to us (he is still the majority owner) claimed it would be reno'd but then he fired the company that was dealing with it 3 years ago and he hasn't done anything else since, despite 2 lawsuits from other owners and a million phone calls / emails from us. I think he's a crook, DH thinks he's "weak". Our RE lawyer told us we need to get a lawyer involved. (I know that sounds weird but our RE lawyer is not technically a lawyer here. She's a "notaire", they do RE transactions, estate planning, wills, trusts, etc, but they can't sue and they can't go to court. Since a "notary" in the US is something completely different, it was easier to just call her "our RE lawyer". But she cannot do certain procedures a lawyer can do, ie file a lawsuit and go to court.) 

The majority owner of the building wrote to me two days ago to say he was in deep depression but he would try to carry on with the procedure regardless. My guess is he's planning to declare bankruptcy. I ripped him a new one by email, then softened and told him we would help him with the procedure. Never heard back. My emails will have either spurred him into action or caused him to block my email, I don't know yet. 

So it looks like we need to get a (real) lawyer but frankly we don't want to spend the money / time. I already know who I would / will use. But the agency has placed another ad and they are already getting calls for the studio so I'm hoping we can ride this out and just place another tenant who will hopefully stay longer. We have made some progress, ie the latest tenant got her own phone / internet line and electricity. Before that both were linked to some central account with (I'm guessing) the wonky majority owner.

The manager of our rental agency is also looking into the situation for us. They have been GREAT. 

We plan to get the other owners together in September, but July / Aug in France is not a good time to do anything because people go away for weeks at a time and the court system is closed. And I'm overwhelmed / overworked / tired. 

I DO think the guy who sold to everybody will eventually deal with it, because he still owns other apts in the building, and he wants to sell them, and at this point (per new laws) he can't unless there's a HOA in place.  

I know that may sound negligent of me, and I'm sorry, but it's honest. If the agency can rent the apt again, I'll probably let things slide till fall, and at that point, try to get the other owners together and start the legal procedure to start another HOA. I'm struggling with a bunch of other things these days and I know that I can't take this on now. I'm sure I'll be able to later. With any luck the guy will have rallied and started the procedure himself. 

Obviously it would be much easier to help him since he is a RE professional (now based in the south of France) so he knows what to do and although I am not a pro, I am local. But he is totally uncommunicative and after over a year of it, I've finally made my peace with the fact that there's nothing I can do about it. I have his work phone / email, I harass his poor assistants (nicely), but he never answers the phone and very rarely responds to our emails. DH has tried too, also, to no avail. 

ETA: At this point my only consolation is that the entire neighborhood/riverfront has been / is being reno'd, except for that building.  Our monthly mortgage payment is very affordable, only 305e per month. I suggested lowering the rent to the agency, they said no, it's absolutely FMV. But that's always an option too. 

[debthaven]

I am SO FED UP!!! But we had a VERY good run with that apt, the same fantastic tenant for 4 years. This tenant was great too, until she decided to leave.

So I'm trying to be philosophical about it and look at it "in the scheme of things".

But I can assure everybody here, we will NEVER buy another rental! We are DONE!  

ETA: I need to add another tagline, but we now owe 32K euros on it. 

[debthaven]

Zib how many rentals did you have, and how many do you have left? Please, give me hope LOL ...

[Bonny]

Jun 27, 2015 15:54:11 GMT -5 debthaven said:

I am SO FED UP!!! But we had a VERY good run with that apt, the same fantastic tenant for 4 years. This tenant was great too, until she decided to leave.

So I'm trying to be philosophical about it and look at it "in the scheme of things".

But I can assure everybody here, we will NEVER buy another rental! We are DONE!  

ETA: I need to add another tagline, but we now owe 32K euros on it. 

Why not take advantage of the vacancy and sell it?

You know the reno process is going to take a looooooong time especially if you think this guy is going to file BK. Why give yourself another part time job dealing with this?

[debthaven]

Because we can't sell it without a HOA ...

[Bonny]

Jun 28, 2015 1:38:18 GMT -5 debthaven said:

Because we can't sell it without a HOA ...

How did you buy it then? Does France allow a direct purchase from a developer with no HOA?

Here in the States you couldn't get conventional financing without an organized HOA. You also will have problems if any one entity owns more than 10% of the units.

I'm sorry. This sounds like another long PITA situation for you.

[debthaven]

It had a HOA when we bought it Bonny. 

Thanks. Yes indeed it does. :-(

[Deleted]

Sighh....i feel for all of the LLs' here that are experiencing problems. It really sucks...makes me more skeered to try renting out our main home, than to sell it. On paper, it's a no-brainer: Rent it out for  length of time and then sell it...(it's paid off) Nothing is stopping us from renting it out since paying it off a few years ago either. Maybe rent an apt until dh retires (4 yrs....or sooner, esp. if we chose to become landlords, it's a waterfront property too..) We've already purchased our retirement home. We use it every weekend practically; vacations, etc. It's only 90 min. from our main home.

If we rented our main home out now, we'd be able to move alot closer to dh's work, which would cut down on, in priority order, his commute (currently 6 hrs./week), the approximate $5k/yr. he spends in fuel, and 20-25k less miles/wear and tear on his car every year. And we'd collect rent (!)from the tenant(s). In a perfect world.

But I'm skeered of getting a scammer tenant, OR a great tenant whose finances suddenly change for the worse after signing a lease, OR having to evict, and/OR spend $$$$$$$$ on their (deliberate?) destruction (esp. w/an eviction) We're cognizant of the costs of maintenence/upkeep; changing flooring, painting, and expect those things. Everything is in good working order; replaced/remodeled all along while being here.

We've discussed it several times, and I research.. (biggerpockets, MMM, etc....there's many..) but can't seem to pull the trigger. No doubt after living here 18 yrs.(this year) and maintaining/remodeling it throughout that time has us emotionally attached.....(memories, time, investment, enjoyment..) Sigh.. 

How does a homeowner become emotionally UNattached to their property, enough to pull the trigger? Is it the obvious; ie; turning your property into an income producing asset, and from then on looking at it as such...like any other business venture?

If anyone has a suggestion on how to overcome my fears or any advice/comments, I'd really appreciate it..

Didn't mean to hijack the thread and I apologize for my blathering about it and making it so long..

[bobosensei]

@shabbona I haven't been a landlord, but I did work in property management for 3 years.  I managed areas of up to 900 duplex homes so I have experience moving people in and out, trying to collect for damages, and working with contractors to do repairs, etc..  After that job there were many years where I thought renting your home was a horrible idea, but I think now I'd be willing to do it as a way to diversify my investments.

I think the biggest thing is to do a good credit and background check on your renters.  From what co-workers told me at my previous job a big reason we had issues with tenants is because we could not do credit or rental history checks (we were a private company working on a military installation and had to use the military's rules).  We had to take whoever was active duty, and when people couldn't rent elsewhere due to whatever issue they came to us.  We also rented to a very young group of people, average age 19-25, most had 2-4 kids (toddlers) and one parent in a war zone and gone more than 50% of the time so they were essentially a single parent under very stressful conditions.  These were young kids who'd never taken care of a house before.  They didn't know you need to clean around the edge of a tub regularly and if you don't you get mildew- not black mold.  They didn't change out air filters (which we provided free) which caused a lot of clogged lines and leaks.  They wouldn't watch kids in the tub and having to replace all of the linoleum in the kids bathroom was something I had to do many times.  The kids were always flushing toys down the toilet, and the parents would try to deny that they were responsible when the plumber would take a photo of what they pulled out.  I saw young kids do much more damage to the homes than pets.  They would write on walls, spill kool aid all over the carpets, and I saw several cases of carpet and padding needing to be changed out because the kid would take off the diaper and then pee in the room over and over again.  Another common thing to see was destroyed blinds either from animals or kids.  Also if the home had hollow doors you'd either have no issue or a need to replace 10 doors between the closets and bedrooms.  The pet damage tended to be grass torn up from a dog left outside most of the day, and sometimes in the house they would chew the bottom of the door jamb.  But grass grows back with some grass seed, water, and time.  We were later able to charge pet fees, both a nonrefundable portion and a refundable portion though that probably depends on your local laws.

I don't say those things to scare you, but to point out what I would do differently if I were renting my home.  First, I would only rent a home with hardwood floors and tile instead of carpet and linoleum.  I hardly ever saw damage done to hardwood or tile though that only made up about 15-20% of the homes I managed.  If you do have carpet- not the end of the world, but you have to realize that average life expectancy is only about 5 years and your tenant might want it replaced before you would if you were still in the home.  If you have expensive blinds in the house and you know the tenant has kids or animals you could ask if they want them changed out to the cheapie wal-mart style blinds.  Make sure they know the cost of replacement and get a good damage clause in your lease.  Price point is another thing.  The homes I managed were in the price range of a younger population that came with more risks.  If you are renting out your home (which I assume is nice, and that is why you are worried about it) then it is likely it will be in a price point where you aren't attracting someone who won't care for it.  You can't expect them to care for it like you would, but someone paying more than average in rent is more likely to care about what the house looks like and is less likely to just tear things up.  On the flip side the small percentage of homes I managed where military colonels and generals lived you get a whole different kind of issue.  I didn't have to call them to tell them to pick up the trash and dog poop from the yard, but they could be just as stressful in a different way.  They want things repaired that aren't broken or they want things to be 100% perfect all of the time.  For example, they had houses with two separate AC units, but heaven forbid that one would go down in the summer.  They expected it to be fixed immediately- forget the fact that it can be hard to get someone in the dead heat of summer that can respond in less than 24 hours- and they had another unit working in the home.  They want everything done immediately and to perfection.

Maybe in your case your home is not best suited for renting, but you could still sell the home and buy a rental that would be a better fit.

[zibazinski]

When I lived where my rentals were, I inspected every few months. If there was dirt or bathroom not cleaned properly resulting in mildew, I pointed it out and they had 30 days to fix it. Yes, I re-inspected. I also left filters usually two bought in packs of three. One new one was in. I brought three in a package with me. Pointed out when they mailed rent check, change filter. If I inspected and filters were sitting there, I mentioned it. Firmly. They were responsible for their own utilities so them changing filters was smart. As far as toys down the toilet, my leases stated that tenant damage was on them and that the plumber would be collecting from them. Amazingly that took care of toys down the toilet. My kids never did that or flooded the tub. Ridiculous. That's just lazy and stupid.

[Bonny]

@shabbona,

If you're emotionally attached to the house I don't think you ever can REALLY let go. Over the last 14 years we've rented out main houses twice, my FIL's house is in vacation rental service and my mother's condo was converted into a rental.

Here are some things to think about:

If your home is in tip-top shape sell it vs rent it. Even if it's not intentional your renter is not going to take care of the place like you will. You will take this personally.

If you have a significant gain you really want to take advantage of the homeowner's cap gain exclusion ($250k single/$500k/married). While you can rent the house for up to 3 years you risk significant market risk.

Market risk. Are you in the L.A. area? I maybe getting you confused with another poster. So. CA is hot, hot, hot. This is not a sustainable market. Sell, take your profits and invest them according to your asset allocation.

Remember that real estate is a risky investment because of the barriers to entry (high costs to buy), illiquidity, interest rate risk and the general volatility of equities.

Personally we are looking to sell one of our properties. They are on the upper end (upper middle class-not rich) are not the best investments from a ROI but more importantly we do not need five homes.

FWIW I've not had anyone do deliberate damage but I've had one tenant not clean the house for over a year which resulted in me needing to replace the high end carpet my mother installed 10 years before its time. I've done two evictions while emotionally painful, financially could have been a lot worse.

Good luck with your decision.

[Deleted]

Thanks bobosensei...I know your intention wasn't to scare me, but wow...

I am about as interested in dealing with that kind of nonense...(shivers...) (even indirectly via a PM, which we would have living 90 min. away both before retiring and/or afterwards...) as I would be in having my eyes clawed out.

Although I do like your suggestion of selling our home and purchasing one or two other homes, at this time I'm more inclined to continue learning about how to vett heavily in the screening process, while at the same time DE-emotionalizing myself of our property. (It can be done via retraining my psyche) Keeping this property and proceeding saves me considerable $$$ (selling/closing costs of each property; mine plus one or two others) and significant time/energy to accomplish those goals..

I CAN find the right tenant for my property. Reminding myself of the income it will produce for 
us, and therefore speed the timing of FIRE'ing even earlier/faster than our current projected 4 yrs., is, at this point, the driving force and incentive in transferring my personal feelings of ownership of our property, to that of income. And it is working..

I've begun this process (mentally/emotionally/financially) since posting my inquiry last night....and feel much better today! By the time I retrain myself, it'll be my new normal.

Thank You for taking the time to respond, your post was extremely helpful. I know what to do, thank you! 
  

[Deleted]

Thank You Bonny and Zib...I am reading (and re-reading) your posts...

Bonny, no we're not in CA. We're in the Midwest, normal appreciations here.

[Deleted]

Zib......thanks, yes Inspections! Tenant Damage Clause....gotcha, thanks. I've just begun my researching about this topic..
 
Bonnie...am learning about ROI (return on investment) just started researching formulas, etc. Will take me time to understand. What is ROI on a paid off property, 's I need to find the answers to, still...

As far as the cap gains tax were we to sell, we'd stay within the limits of the married up to 500k limit.

Market risk.....yes...always risk involved. Am cautiously researching..

[zibazinski]

Also, check the reference BEFORE the one they are living in now. To get rid of them, a LL might say they were great. To make sure they don't have a friend vouch for them, check ownership name to the place they are currently renting or their reference. There used to be a website of crappy tenants. Don't know anymore, but I'd check that, too. Find an excuse to go by the place they're living in now. My mom always managed to "forget" something she needed to give a prospective tenant. 

[bobosensei]

Another thing you can do is look inside their car when they go to see the house.  Someone too lazy to keep the car clean is probably too lazy to clean the house.

[Bonny]

Jun 30, 2015 11:14:35 GMT -5 @shabbona said:

Zib......thanks, yes Inspections! Tenant Damage Clause....gotcha, thanks. I've just begun my researching about this topic..
 
Bonnie...am learning about ROI (return on investment) just started researching formulas, etc. Will take me time to understand. What is ROI on a paid off property, 's I need to find the answers to, still...

As far as the cap gains tax were we to sell, we'd stay within the limits of the married up to 500k limit.

Market risk.....yes...always risk involved. Am cautiously researching..

I think you need to look at it from a if I had the net chunk of money from selling it would I buy this property as an investment?

Take the gross annual rent - (vacancy factor) - expenses (taxes, insurance, maintenance) and divide by the net sales price (say FMV - 8% for sales costs).

[zibazinski]

Jun 27, 2015 16:19:37 GMT -5 debthaven said:

Zib how many rentals did you have, and how many do you have left? Please, give me hope LOL ...

I had 6 in one subdivision , 4 in another, and two alone. I have one left which I hope to sell next year. 

[DVM gone riding]

background check

I know there are several on here that use online websites to conduct background checks.

Any suggestions?

[Bonny]

After one tenant faked his credit report and we went through the eviction process, my CA attorney offered to run a Lexis-nexis report for my future tenants. He's a friend and does it for free (it just takes a few minutes). It's detailed enough it lets me know if they get speeding tickets.

[DVM gone riding]

Jul 12, 2015 11:04:47 GMT -5 Bonny said:

After one tenant faked his credit report and we went through the eviction process, my CA attorney offered to run a Lexis-nexis report for my future tenants. He's a friend and does it for free (it just takes a few minutes). It's detailed enough it lets me know if they get speeding tickets.

Nice. That sounds like a good deal!

[Bonny]

For my latest chapter read my thread "My Downstairs Neighbors Think I'm an income Stream". Part of me wonders if they would pull this cr*p if I lived there.

[Deleted]

After researching alot (and making my brain bleed...) we're gonna pass on becoming LLs with our main home (after we retire) and sell it, instead. After weighing many potential pros and cons, this is the right choice for us. We can finally put this decision to rest and 'move on' as it were, lol..

Bonny, sorry I don't have anything other than I'm truly sorry for what is happening to you. That is awful...I hope it all works in your favor...sounds complex to say the least...

[debthaven]

Update on my post 219 ... the tenant left on Saturday. Today the agency found a new tenant who is moving in Sept 1! We did lower the rent a bit but that was our choice. We absolutely wanted to find a new tenant by the end of this month when the agency closes for most of August.

We will lose over a month's rent but it could be a lot worse. The young woman is starting a 3-year nursing program about 15 min away so hopefully she'll stay put for a while. Her dad co-signed the lease. 

I know we still have to deal with the HOA situation. We are still planning to look into that in Sept / Oct but at least the apt will be rented as of Sept 1, so I'm relieved. Of course I'm also hoping that the arse who originally owned all of the apts (and still owns the majority share of the building) will finally move forward as promised.

The agency is charging us 50% of their usual "finder's fee" because the first tenant they found left so soon. Again, it's not ideal, but it could be worse. After 12 years of dealing with the "wonky" agency we are now dealing with 2 great, "normal" agencies. I never could have imagined it could be so easy to deal with an agency!

ETA: We bought our first rental in 2002. Our plan has always been to use the rentals to "build wealth" (hell or high water) until our DS3 finishes either HS (our minimum goal) or college (our stretch goal). DS3 will be a HS senior in Sept.

So DH and I agree that we need to "stick it out" for one more year. I'm hoping the HOA issue in this place will be resolved by then. As of that point, if/when something changes with one of our rentals (either this one or another), we both feel we can allow ourselves to sell. 

So just one more year!!! 

[Bonny]

We haven't had an update in a while so I thought I'd add a couple of recent exchanges I've had.

Tenant in the condo let me know about a week ago that they are having problems with the washer again. He said they've been using cold water as repair person suggested. DH disagreed with the repair person's diagnosis that the problem was condensation. Condensation happens with cold, not hot water. I asked the tenant to run a small load on warm to see if the problem occurred again. He said they were done with laundry for the week. Okay. So this past Sunday I sent an e-mail asking how the laundry went this weekend. I got an e-mail from him stating that sometimes when they are feeling lazy they send out for a laundry service and this weekend they were feeling lazy.  Now I sort of get it; she's a doctor and he's an engineer and they have two small children. But still. I'm clearly not charging enough rent and I'm not. I felt terrible when I had to raise their rent by $200/mth to $3,300 mth. The unit directly across from mine (same floor plan) went onto Craig's List last week for $3,900 mth and appears to be rented. I will not feel bad next year if I raise the rent another $200 to $3,500 and if they go, they go.

Tenant in the N. San Diego County house contacts me over the weekend with three complaints;

MB light and fan aren't working, screen doors don't work and one of the sprinklers is broken and proceeds to lecture me about how wasteful it is, how irresponsible it is to waste water in the drought and how it affects her water bill. Mmm ok you just told me about the problem and the gardener is coming tomorrow. Please let him know and he will fix the sprinkler. I reminded her about how the MB fan and light were controlled by a controller. Perhaps the battery died? She can take it to Home Depot and they can help her. And the two screens were recently replaced; the main door was replaced June 30 and the MB screen door was replaced just before she moved in November. She needs to be gentle with them. And perhaps we could have the handy man do some adjustments. I got an immediate e-mail that the MB fan and light were fixed and that she's gentle with the screens and she thinks they are flimsy.

Then yesterday I got an e-mail from her about throwing away a rug that's in the 2nd bedroom. A prior tenant had left it and I said during the walk through she could get rid of it (there were some stains on it). I said it was fine,  but she might want to replace it with a smaller rug that she liked better because the rug helps keep the furniture from gouging the wood floor. Then last night I got an e-mail from her "Thanks Mom". She's about 10 years older than I am.  So I'm thinking WTF? Why would a tenant send e-mails like that (e.g. the lecturing me when she just made an complaint and being flip with the mom comment? She's reminding me the older single lady in my AZ house who went nutso on me, told me she wouldn't be renewing the lease, changed her mind, wanted to stay and went ballistic when I told her that it was best that we parted ways.  So now I'm thinking that this tenant wants to end our relationship too because I won't cater to her every need and want. And that was EXACTLY what I thought when I met this person. Pretty woman, used to people catering to her and HIGH MAINTENANCE.  The mean part of me is looking forward to giving her notice in January that we will be selling the house.

Rant over; thank you for listening and  to my well behaved, early paying (new) tenant in AZ.

[zibazinski]

I booted two pita tenants over the years. Both were shocked that I did. I also told their new landlords why I didn't renew their leases. I always wondered if they rented to them or passed. Sorry but if I got booted because I was a pita, I'd not ask for a reference.

[Bonny]

Aug 12, 2015 15:06:00 GMT -5 zibazinski said:

I booted two pita tenants over the years. Both were shocked that I did. I also told their new landlords why I didn't renew their leases. I always wondered if they rented to them or passed. Sorry but if I got booted because I was a pita, I'd not ask for a reference.

But they don't see themselves as PITA tenants. They pay on time and think you need to kiss their *ss. And you are a mean, cheap LL because you won't do everything they ask. Whaaaaaa!

The screen doors really fry me. These are about 1 year and less than one year old. The previous doors (same Home Depot doors) were on for nine years..

[zibazinski]

I don't care what they think. Paying rent on time does not entitle you to call me at 10:30 pm on a Friday night to tell me the light outside your door needs replacing. Guess what? Not an emergency and I'm not coming over. Yup , they're always shocked. Even when I nicely then not so nicely warn them that their lease will not be renewed if they keep bugging me for nonsense. So I give them 60 days notice and they start the whine. Fortunately I don't have to give them a reason in writing. I simply say they have 60 days to vacate. Smiling the whole time I do it. Costs me money to change tenants but sometimes it's worth every dollar.