Quick Spruce-Up Between Tenants

Time to do a quick spruce-up between tenants at one of your rental properties. The walls have lots of holes in them from previous tenants hanging pictures and things on the walls over the years.

You could just cover the walls with wallpaper. The drawback is that it is difficult to clean between tenants. One a corner or a seam starts to peel and gets ripped you need to re-do the whole room, which is expensive and time consuming.

You could replace all of the drywall, another costly option. Depending on how bad the walls are, replacing the drywall might be your only real option.

You want to paint with something that is easy to clean and that usually means a semi-gloss. You don’t want to use white because it shows any dirt really quickly and always seems to look dirty.

A textured paint, like Ralph Lauren Suede, will do a decent job camouflaging the imperfections but it’s expensive. You can make your own a lot cheaper. Go to your local pool supply store and pick up some filter sand. This sand is very fine.

In a separate 2 gallon pail, put in one gallon of paint. Start adding the sand to the paint while stirring it. Be sure to keep track of how much sand you are adding because one gallon of paint will not do the whole room. When you get the right consistency for the coverage you want start painting. Remember to stir the paint often because the sand will sink to the bottom.

You can also put a clause in the lease specifying that nothing can be hung on the walls or that only small finishing nails can be used to hang things.

Buying a Rental Property

If you are thinking of buying a rental property there are somethings you need to consider, somethings you need to ask the seller, and somethings you need to put in your offer to purchase.
Questions to ask the seller.
1. Are any tenants in arrears? If so, how much?
2. Do tenants pay their own utilities?
3. When was the last time the rent was increased?
4. Do the tenants have signed lease agreements?
5. If owner pays utilities, copes of utility bills.
6. Ask for a copy of the financial statement showing income and expenses.
7. Does the building meet all the codes?
8. Are the rents always paid on time? Or are they a few days late?
9. How much are the property taxes?

Things to put in your purchase offer.
1. If there are deadbeat tenants that the current owner evict them before closer and that you get vacant possession of the building.
2. That the current owner be responsible for all eviction costs relateing to an inherited deadbeat tenant. You don't want to find out after you take possession that the previous owner lied about any arrears.
3. That the building meets all current codes. That the seller is responsible for bringing the building up to code.
4. All documents or copies of documents relating to the rental property be turned over to you. You will want copies of leases and any notices served on tenants.

You will also want to hire a certified building/home inspector who will provide you with a detailed written report. Make the offer conditional upon a positive inspection report. You might also want to get the advice of an accountant to find out if the property you are considering will turn a profit for you. If the rents aren't high enough to cover the operating costs it is obviously not a good investment. Make sure you have your lawyer look over all paperwork including leases. If he finds something lacking in the leases make it a condition of sale that new leases be signed.
Go to the library or book store and read as much as you can on purchasing and running rental properties. You'll want to go into this venture with as much knowledge as possible.

How to Collect Utility Bills

You’ve got a couple or houses that you’ve rented out. The tenants pay their own utilities, and the utility bills are in their names. If the tenant skips out without paying the utility bills you figure you’re covered, it’s not your debt.

If your tenant skips out without paying their hydro the hydro company can and will go after you, the property owner.

Because of privacy laws the utility company cannot give tell you if your tenant is behind or by how much.

In some jurisdictions you can collect a hydro security deposit and in other jurisdictions you can’t. If you can collect a deposit you must pay the interest on the money deposited.

You could leave the hydro in your name and give the tenant a copy of the bill when it comes in, giving them 14 days to pay it. You might still get stuck with a hydro bill if they don’t pay it. The only way you can have the hydro service disconnected is if you don’t pay the bill. This option will have a negative effect on your credit rating. Also the tenants can take you to court for not paying the bill and having a vital service disconnected. They could end up with a large cash settlement in court.

The best thing to do in this case is to have a clause in the lease that the hydro or other utility is in their name and that they must provide you with proof of payment by a certain date. This date will depend on the billing cycle of the utility. You can also get the tenant to sign a form giving the utility provider permission to give you information regarding their account.

Breaking a clause in the lease is grounds for eviction and you should be able to get rid of the deadbeats before they owe too much. A good lease with all the right clauses is a good insurance policy against the professional tenant.

Deadbeat Tenants

Deadbeat Tenants

Following through on doing a thorough check of a prospective tenant can seem like a daunting task. But it doesn’t have to be.

You’ve called the current landlord, the employer and the references. They all seemed to bend-over-backwards to tell you what a great person tenant x would be. A little too good if you know what I mean. But how do you find out more? Do you not rent to a potentially great tenant because of a gut feeling you have? To you rent to them only to discover you should have listened to your gut?

There are ways to verify the information given and get more information to base your decision on. In a previous post I mentioned the reverse look up for phone numbers. You can also do this for addresses, cell phones, email address etc.

Don’t over look doing a criminal records search, bankruptcy search, search the sex offender registry. Seems a little overwhelming doesn’t it. Not really, if you know where to go. I have found a really great site Click Here! where everything is all in one place. It saves you a lot of time trying to find the right information.

If you’ve been stuck with a deadbeat tenant you can claim this as a loss on your taxes as long as you can show that you tried to collect the debt.

Be wary of the deadbeat tenant who sends you a letter saying they intend to pay you. In some jurisdictions you can’t get a judgment if you can’t prove they intended to rip you off. The professional tenant will cover themselves here by writing a letter saying they never meant to rip you off and intend to pay you.

Good luck in dealing with and avoiding deadbeat and professional tenants.

Dead Beat Tenants

You’re just a small time landlord with a big time headache. You’ve been stuck with a deadbeat tenant. There are two types of non-paying tenants, those who just don’t have the money and the professional tenant. Look out for the professional tenant; they know more about landlord-tenant law than most lawyers. It usually takes at least six months and a lot of money to remove a profession tenant. Do you have an iron-clad lease or tenancy agreement that will stand up in court? Was it one you downloaded off the internet for free or did you purchase a pad of 25 generic leases from your local book store? There are things you can do as a landlord to limit your exposure to becoming the professional tenant’s next victim.

Start by getting a copy of your local landlord-tenant laws. These vary, sometimes greatly, from jurisdiction to jurisdiction. Read it carefully and know what your rights are as a landlord should things go wrong down the road.

When a prospective tenant shows up you need to have them fill out an application to rent. This is not a lease or a rental agreement. Always make sure you get references as well as employment history and contact information for their current and former landlord. You also need to get written permission to do a credit check. If a prospective tenant is unwilling to give any of this information then move on to the next prospective tenant.

Take the time to call the references and previous landlords. A professional tenant will often get a friend to pose as their current landlord. To verify this use a reverse look-up of the phone number and see if the name and address match the information given. You can also go and see the previous landlord in person to make sure the information is legitimate. Spend the money on a credit report, it will be money well spent.

Once you’ve settled on who you’re going to rent to you need to get all your paper work in order. You need an iron-clad lease in case you need to evict. You need a pre-occupancy inspection report signed by both you and the tenant before they move in. This is important if you need to sue for damages at a later date. You should also get the vehicle information of the cars your tenants will be parking at the rental unit, including the VIN number. This is useful if you get a court awarded settlement because you can then put a lien on the vehicle for some or all of the money owed. In some jurisdictions you can also force the sale of the vehicle to cover the awarded costs.

If they pay by check keep a record of their banking information including account number. You may be able to garnishee their bank account should it become an option to recover damages.

The costs involved with protecting your property and investment from unsavory and professional tenants can be quite expensive. You have the lawyer’s fees for doing up all the paper work to make sure it will stand up in court. The time you spend verifying the references and costs of a credit check.

My former employer owns several rental properties on top of his other businesses. When I first took over there were no written leases or rental agreements on any of these properties. It took well over six months to get rid of a professional tenant as well as over $3,000.00 in court costs and Sheriffs fees to have them removed. This doesn’t include the lost rent, unpaid utility bills and damages. The last professional tenant I evicted was quick and reasonably painless. It only took 10 days to get a hearing and the adjudicator ordered the tenants be out in 10 days. It’s amazing how much time, aggravation and money proper paperwork can save you.

One product that I’ve found that is extremely useful is the Attorney’s Landlording Kit. It contains all the forms that you need in electronic format, which is great because you can customize them to suit your individual properties. In all there are 27 different customizable forms. At a cost of less than $50.00 it is great investment for the small landlord. Whenever you need one of the forms you just print it off. For more information on this useful product please Click Here!

If you have any success stories in getting rid of deadbeat tenants please share them with other readers of this blog. Thank you.

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