Jul 08

Landlord Entry Rules

Landlord Entry Rules

I was talking to someone who was interested in renting a unit the other day. She asked what our policy was on entering an apartment that someone lived in. I explained our policy (which is detailed below) and she then said that the reason she was moving out was because her landlord has used the key to enter her unit twice after knocking. The tenant was home both times and was startled and a little scared. No advance notice was given and she said there was no emergency. The landlord stated that the reason for entry was to make sure the tenant was OK. This obviously made the tenant feel very uncomfortable. Her lease is up and she is now looking for a new place to live.

Know The Laws

Responsible landlords in Kentucky know that they are required to give at least 2 days of advance notice before they can enter an occupied rental. This is for situations that are not an emergency and entry of the unit must be at a “reasonable” hour. This includes instances where a landlord intends to make a requested repair or show the unit to a prospective renter. It is up to the landlords and tenants in Kentucky to work out what constitutes “reasonable” hours in the lease agreement.

Emergency Situation

However, if there is an emergency situation, landlords in Kentucky are usually allowed to enter an occupied unit without prior notice when the situation threatens the unit’s inhabitants. The lease does not need to specifically state this. An example of this would be a water leak in an upstairs unit that is flooding the lower units. You would be able to enter the unit to stop the water leak and then schedule the repair.

Notify The Tenant

Tenants have rights even though they don’t own the property. You can notify the tenant by calling them, emailing or texting them. But, if the tenant objects, you will need to give them 48 hours notice by sending them a certified letter stating the date and time you are going to enter the unit.

Landlord Rights

If the tenant still refuses to allow you to enter the unit on the date and time stated in the certified letter, in Kentucky, you would then send a Cease & Desist. I am not an attorney, so if you are faced with this type of situation, please be sure and get advice from an attorney familiar with real estate laws in your area so that you know how to proceed.

Jun 22

How To Find A Great Tenant For Your Rental

How To Find A Great Tenant For Your Rental

All landlords want great tenants. How do you find a great tenant for your vacant rental property though?

Searching for a great tenant can seem like an impossible task. I have found that you have to talk to a lot people to find one or two who will fit your description of what a great tenant is.

The first step is to list your rental requirements on your listing so that you discourage those who don’t qualify not to contact you.  The second step is to conduct a thorough pre-screening of every interested party before you show the property. Why bother to allow people to see your vacant rental property if you on’t know if they would even qualify to rent from you?  The third step is meet interested parties in person.

 

Pre Screening Potential Tenants

We are going to talk about Step Two of this process which is the pre-screening step.

Advantages of Pre-Screening:

  • Find out more about anyone interested in your property
  • Eliminate a lot of people because they don’t qualify
  • Only show your property to people who meet your qualifications

 

Keep in mind that at this point, you will only have verbal answers to your questions. Hopefully, no one lies to you but you will find that out when someone actually submits an applications. That would be grounds for immediate denial.

 

What Questions Should You Ask?

For Fair Housing reasons, always ask the same questions of every person that calls. Going through this process will help you identify people who can potentially be a great tenant for you.

The longer you do this, the more rhythm you will have. If you notice that you are getting mostly through the list of questions and keep reaching one that is disqualifying, change the order of questions.

For example, if you do not allow pets, ask that question close to the beginning. There is no reason to ask a lot of other questions if this person has a pet.

It is amazing how much information someone will tell you when you ask open ended questions!  Depending on how much information you want to know, you can add to these questions or change them however you want.

Some basic questions that I start with are listed below. Be sure to customize them or rearrange the order to suite you. If you don’t accept pets, move the pets question up closer to the top. I can’t tell you how many times I asked that towards the end and had to tell them I was sorry.

 

Examples of Pre Screening Questions:

  1. How many people will be living in the home?
  2. Where do you live now?
  3. How much is your rent?
  4. Why are you moving?
  5. If you’ve been at your current residence for less than two years, why do you move so frequently?
  6. What type of pets do you have?
  7. Where do you work?
  8. How long have you been in your current job?
  9. How much is your gross monthly income?
  10. Do you have any credit issues that we need to know about?
  11. If you have Section 8:
  12. How long have you been on section 8?
  13. Have you met with your caseworker yet?
  14. Do you have a voucher and how much is it for?
  15. How many bedrooms are you approved for?
  16. How soon do you want to move in?

 

Again, customize the questions to meet your needs.  Your questions should always be open ended in order to encourage everyone to tell you more. Be prepared to ask more questions as needed and ask for more details.

This process is easy to implement and allows you to easily see who doesn’t meet your basic guidelines.  A qualified list of pre-screened people will start you on the path to finding a great tenant!

Jun 11

Tips For How To Handle A Tenant Who Is Not Paying Rent Due To Covid 19

 

Tenant Not Paying Rent Due To Covid 19

As of the date of this post, courts are beginning to open back up in many areas.  So, this answer will fit what is going on right now.

Times are tough right now for landlords and tenants. Everyone has a different idea on how to proceed. There is a lot of debate about what is “right”.  To say the least, this is a very hot topic. Most tenants do not understand that landlords are not wealthy and there is a mortgage on the property that the tenant is living in.  So, when the tenant can’t pay, the landlord can’t pay the mortgage.  Many landlords are struggling just like tenants.

The bad news is that, unfortunately, there is not a lot you can do right now about non paying tenants.  This is going to be disastrous for many landlords who depend on the rent to pay the bills.  It can be very frustrating to watch the news and hear so many people insisting on rent forgiveness.  It seems like a lot of people are painting the landlord as the bad guy.  The bottom line is that no landlord decided to have rental property just so it could be rented for free.  Owning rental property is a business.  The income is counted on by most landlords just to be able to keep the property.

I am lucky.  Most of my tenants are paying.  The majority of my tenants who couldn’t pay contacted me and explained their situation. Most were waiting on their unemployment and/or their stimulus check.   It is much easier mentally and emotionally to help these tenants out as they were proactive.

When reviewing the non paying accounts, I realized early on that many tenants who were not paying were the same ones who either paid very late every month or were tenants I had to send 7 day letters on to actually get paid.

 

Dealing With A Non Paying Tenant

Communication is key with non paying tenants.  When this first started, I made sure that I spoke with every tenant not paying rent.  If you have not done this yet, then I recommend you do it today!  The good paying tenants were very embarrassed and there were a lot of tears.  But, they are at least making an attempt to pay something.

As for the few tenants that are not paying at all, they literally have no money to pay their rent with.  Some are not eligible for unemployment and used their stimulus money to pay utilities and buy groceries.  Others, especially my commercial tenants, have tried to get business loans but have either been denied or have not received the money yet.   I have both residential and commercial tenants so their ability to pay the rent depends on a number of things.   The commercial tenants who have restaurants or other businesses are hurting the most.  There is nothing I can do until evictions can be filed. I am staying in touch with them though.

I have one tenant who has indicated that he doesn’t intend to pay until I make him.  I have reminded him that the rent will have to be paid eventually. I told him that if he doesn’t, once I can file an eviction, I will be filing on him. He told me to go for it.

Two of my tenants had heard on the news that they didn’t have to pay rent.  They really thought that the moratorium on rent meant that they didn’t have to pay at all!  Once I informed them that what they heard wasn’t reality and that they would owe all of the rent eventually or be evicted, they paid. One laughed and said he thought that was too good to be true!

For the tenants who are chronic problems, you either have to figure out how to get them back on track or evict them them once you can.  That is something you will have to decide.  Sometimes it is cheaper to work with these tenants than to evict them but if they are four to six months behind on the rent, there is really no way they will be able to get caught up.

 

Can I Evict For Issues Other Than Non Payment?

The answer is that yes,  you can.  If you have other issues that are related to tenant not paying rent, find out what the rules are in your area first. In my area, I can send them a Cease and Desist and then file an eviction if the situation has not been rectified. I am in the process of doing this with tenants in an apartment building. They have been disturbing all of the neighbors with their cussing and fighting at all hours of the day and night.  I sent the Cease and Desist notice and they were shocked that they received it.  After talking with them, I was able to get them to agree to move out.  I got lucky. Stay tuned though because they aren’t out yet!

The biggest issue is that the courts are backed up. A real estate attorney attended our local Real Estate Investor group meeting (online) at the end of May and said that while the courts are opening back up, there is a 6 to 8 week back log of existing court cases. But, at least you can do something and put them on notice to straighten up or they will be evicted.

Also, make sure  your lease has a “peaceful enjoyment” clause in it.  This makes it easier to evict tenants who are loud and are disturbing the neighbors.

 

Action Steps

Keep in mind that most tenants are not bad people. Many have been blindsided by the furlough or loss of a job.  Some are literally frozen in place and have no idea how to move forward. Sometimes you can help them by talking with them and being empathetic. That doesn’t mean you turn a blind eye to your business!

  • Review all non paying tenant accounts and those with balances
  • If you have not done so already, contact all of them
  • Keep detailed notes about what each one said
  • Set up payment plans when possible
  • Follow up monthly to see what is going on
  • When you know the date courts open back up, notify your tenants that eviction filings are resuming
  • Schedule your 7 day letters to go out when appropriate
  • File your evictions as soon as you are allowed to

Resources

Did you know that Covid 19 relief funds are available to tenants?  If you haven’t already done so, find out what resources are available in your area. Compile a list of resources with phone numbers and either email or physically mail them to your tenants. When I talk to tenants on the phone, I give them the resources I have and instruct them to also go online and see what they could fine.

I found out about some programs when representatives from local organizations called me to verify information for a tenant. I then got the information I needed from that person to pass onto my other tenants.  In my area, local churches offer rent and utility assistance year round. Many of my tenants were able to pay their rent with these resources.

Trust me when I tell you that it is well worth your time and effort!  The last time I checked, I had received over $7,000 in rent!

 

Finally . . .

Hang in there. This won’t last forever.  Work with the tenants you can and evict the ones who cannot get caught up. Keep in mind that unless the tenant has kept the property in great shape, you are going to have to make repairs at the very least. If the tenant has been there a long time, you may have to completely redo the unit.  Can you afford to do that?  I don’t know the answer to that, only you do.  You need to weigh the cost of working with a tenant with the cost of evicting this person and having a vacant unit needing repairs.

 

Jun 01

Screening Applicants – Debt To Income Calculator – Case Study

When screening applicants, do you use a Debt To Income calculator?

If you don’t, then you should!

I just had someone apply for a rental home. He currently owns a home and will be closing on it in a couple of weeks.  He told me told he tried to buy a house but had been turned down due to an old bankruptcy.  That didn’t make sense to me but I told him to fill out the request to see my vacant property and to answer the pre-screening questions that would be emailed to him.  Once he did that, I told him I would get him in to see the home.

This happened Friday late in the day. I checked for his responses over the weekend but he didn’t request to see the property. I assumed he had moved on.  Monday morning, I received a notice that I had received an application for my vacant property.  When I looked at it, the application was from the person I spoke to on Friday.

Keep in mind, he did not follow directions and fill out the request to see the property and he didn’t answer the pre-screening questions.  He also has not seen the property.

I reviewed his application and ran his credit.  It is interesting to note that the credit screening report listed him as APPROVED.  There were only two items in collections, one item past due and the rest of his debt was paid on time. His credit wasn’t terrible and his credit score was 585.

When I reviewed his application, I noticed right away that he had four bills listed that he owed.  I ask every applicant to list what they owe monthly for bills.

  • Car payment: $400
  • Car Insurance: $133
  • Cell Phones: $120
  • Child Support: $425
  • Monthly rent: $1,200

Total Monthly Debts, including the rent, are$2,278.  This does not include gas, electric, water, fuel for his vehicle, food and entertainment.

His monthly gross income was listed as $3,900 and his net was $2,859.40

When you subtract the debts from the net income, you are left with $581.40 to pay all other bills for the month.

I use a Debt to Income calculator and when all of the numbers were put in the calculator, his debt to income ratio was too high.  This applicant could not afford this rental home and was denied.

I run across too many landlords who don’t follow all of the steps when screening applications.  This guy seems very nice but he is desperate to move and isn’t using his own good judgement.  If I let him move into this home, the chances are high that he would not be able to pay the rent.

If you want to find great tenants, follow a system and don’t make exceptions. Follow a process and follow every single step.

 

 

May 27

Rental Listing Scams – Protect Your Rental Listings

Rental Listing ScamsRental Listing Scams

RENTAL TIP:  Rental listing scammers are on the rise. Keep a close eye on your vacant properties.

Many of you know that there are people out there who will copy your listing and put it on other sites at a reduced rate. These thieves can be located anywhere in the world and with internet access, they can easily locate listed properties.

Once favorable listings are identified, these people copy your listing, paste it into their account, change the rental amount and then hit “Post” on their site.

Then, renters looking for a new place to live run across these ads and contact the scammer to see the property.  The scammer will tell interested parties to drive by and look at the house. Then, if the potential tenants like it, they are instructed to send the money for rent and the deposit through an app. Once the scammer receives the money, a locksmith is hired to go out to YOUR property and change the locks. The locksmith meets the new tenant at the property and then gives the keys to them.

The new tenant has moved into your property. You have no knowledge that any of this has happened. You also don’t have  a lease or any money from them.

 

COVID 19 

These scammers are using COVID 19 as a reason to not allow access to the house and to not meet anyone in person. This seems to make more sense to potential tenants right now and they may be more willing to take a chance.

 

Tips To Protect Yourself:

  • Type up a note, preferably with your letterhead on it, and tape it in the window by the front door as well as at any other doors in the property.  The note needs to state who manages the property, along with your contact information. This will prevent a locksmith from changing the locks.  A note identifying the real owner also lets anyone who has been told to go look at the house who they should call because your contact information will be on the note.
  • Leave your business cards inside the house just in case. You might consider adding a flier holder to the property as well.
  • At least once a day, search for the address of your home in the Google search bar to see if it comes up anywhere else.  Make sure the listing is yours and that nothing has been changed.
  • Physically visit your vacant property at least once a week to make sure no one has moved in and to check all windows and doors to make sure they are locked.
  • Make friends with your neighbors and let them know the house is for rent. Ask them to contact you if they notice any unusual activity.  Also let them know when the property has been rented.
  • If you use a lock box to grant access, aggressively change your lock box codes. I am changing mine every 48 hours.

 

The Victims

There are two victims here:  The Tenant and The Landlord.   I know of more than one case where a landlord showed up to check on a vacant home only to find that someone had moved in. These people who moved into the home fell victim to the scammer and paid someone else the reduced first month’s rent and the deposit.

This left the real owner of the home with a lot of issues. This owner didn’t get any of the money. The people who moved into the home hadn’t been screened and were probably paying less than what the owner wanted. The new tenant didn’t have the money to pay the real owner any more money.

This is a bad situation all around. Take the necessary precautions now so that you don’t become a victim as well.

How Do You Deal With This?

If you are faced with this situation, you will have to make some decisions.

Your options are:

  • Try to make this new tenant work.
  • Give them notice to vacate and see if they will voluntarily move out.
  • File and eviction and have them removed from the property.

 

Sometimes you can work with the new tenant.  This will require a new leas and in most cases, a rent increase. I would strongly recommend running a credit report on this tenant and following your normal process for approving a new tenant.  If this tenant meets your guidelines, then work with them. If not, then the tenant will have to move.  It is then a question of whether the tenant moves voluntarily or is set out.

Watch Your Properties

It is your job to keep a close eye on your properties but it is impossible to watch it at all times.  A security system would be ideal but is expensive.  Again, your neighbors can be your allies so be sure and enlist their help.  They almost always know what is going on and are usually happy to spy for you.  Have them contact you if they notice anything suspicious. Be sure and let them know when the house has been rented.

Aug 07

Air Conditioning Trouble Shooting Check List

Air Conditioning And Hot Weather

Do you have air conditioning trouble shooting check list?

During hot summer months, you can hear the buzz of air conditioning units running continuously. They are an essential part of many homes.  All of my rentals that I manage have central air conditioning units and some have an additional window unit for second floor areas that are difficult to cool.

Continue reading

Jun 06

Mini Blinds And Your Tenants

Mini blinds and your tenants.

Question:  As a landlord, do you provide mini blinds in your rental homes or do you make the tenant install them?

I love mini blinds in my own home but loath them in rental homes. I have never understood how they can be damaged so badly by tenants!  There is no denying that mini blinds make a home look more finished and make tenants happy.  Installing cheap blinds makes sense given that they typically have to be replaced every time a new tenant moves in. However, the older they get, the more impossible they get to clean.

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May 29

Screen Applicants With Confidence

Screening applicants is a stressful and challenging endeavor.  You typically only have to screen tenants when you have a vacant home or a home that is about to be vacant.

A vacant home does not put money in your pocket. Your goal is to find the best possible tenant that you can find as quickly as you can. To do so, you have to cast your net far and wide. 

Continue reading

Apr 29

Maintenance Issue Case Study

There are days as a property manager when I just roll my eyes as my fingers furiously type an email response. Today was one of those days.  Remember, having procedures in place will save you a lot of headaches! One such procedure is the move in inspection.

Move in procedure case study. Save yourself a lot of headaches! Click To Tweet

I moved college students into a rental home two weeks ago. When I logged into the system this morning, I noticed a work order had been put in by the mother of one of the student’s.

In the work order, she stated the following:
“The burners on the stove are dangerously dirty. It looks as if they have never been cleaned. The oven needs to be cleaned too. The cupboards have grease and dirt on them that were also not cleaned before the boys moved in.”

As a property manager, I make sure that my rental homes are clean before any tenants move in. If the previous tenant does not leave the home move in ready clean, then I hire someone to do make sure it is.  My  cleaning crews typically take pictures when they are finished. These photos are added to the property folder in Drop Box.

Luckily, my move in process is solid. I have a written move in inspection and pictures of the entire house. Part of the move in process is to make sure to get pictures of all appliances, all cabinets, all mini blinds, etc.

I put together an email to this parent and explained that the appliance and the cabinets were clean at the time of the move in inspection.  Her son did not attend the move in inspection but another student did. The stove was operated and inspected.  All of the cabinet doors are opened and closed to check for proper operation.  The stove or the cabinets were clean at the move in inspection. I went to my Drop Box account, pulled up pictures of the stove and cabinets and sent them to the mother. The picture of the stove top was enlarged to show that it was clean!

She did respond later in the day with:

“Thank you. Honestly, when I was there this weekend they were
disgusting. I will talk to my son.”

In all fairness, I don’t blame her for being upset that the stove was so dirty. She did not attend the move in inspection and did not see the home prior to them moving in. I strongly recommend that everyone attend the move in inspections. The reality is that these students are in college and this is not the first house they have rented from us.  Students tend to be independent and I rarely have parents attend a move in. 

This is a perfect example of why you need to have a move in process that is very detailed. Remember to follow it every single time! I respond to emails and texts like this all the time! It gets very frustrating but is much easier to make go away if you have pictures.

Do you have move out letters to send to your tenants who have given notice? If not, you need them!  Grab two letters and a price list below.

 

 

Nov 13

Evicting A Tenant In The Winter

Evicting A Tenant In The Winter

Evicting A Tenant In The Winter

Can You Evict A Tenant In The Winter?  Evicting a tenant in the winter should not be any different than evicting at any other time of the year. Theoretically speaking, as long as you follow the law and send the proper notice required in your area, you can evict a tenant at any time of the year.

I personally hate to evict anyone at the holidays. Doing this makes me feel terrible. At the end of the day, evicting a tenant in the winter a business decision and is not personal. I have to remind myself the tenant signed an agreement stating how much the rent was and agreed to pay it within a specific time frame.

That being said, go online and google “Evicting A Tenant In The Winter”. You will find many people saying that, in their area, they can’t schedule an eviction during November and December.  This seems to be a real problem in many areas of the country.

I live in Kentucky and the courts will allow you to file the eviction but they will not schedule any set outs during the month of December. This means that set outs get pushed out into January and even February every year.  This is annoying and also very costly.  It seems that many tenants in this area know that as well.

Goal Is For Every Property To Be Occupied

No one wants to have a vacant home at any time of year. It is always costly and unpleasant to have a home without a tenant in it. Not only are you losing money, you run the real risk of it being vandalized.

What If You Can Evict A Tenant During Winter

Let’s skip ahead and assume that evicting a tenant in the winter has not been a problem for you. You now have an empty house that is not generating income or paying for itself. Now you are faced with finding a new tenant at the single worst time of the year.  Very few people want to rent a home in November and December.

Evicting A Tenant In The Winter

Why is that?

  • Holidays are in November and December
  • Everyone is too busy
  • It is cold
  • Everyone is short on money

Most people have holiday plans and are frantically trying to get their shopping done.  There is also the fact that it is much colder in much areas. Fewer people are willing to go out in the cold and look at homes.

The biggest factor though is that most people are short of money. They are busy buying gifts and don’t have money to spare to move. 

When you evict a tenant during this time of the year, be prepared for it to possibly sit empty until at least January and possibly February. Hopefully you have a rainy day fund for just this possibility.

Consider Working With The Existing Tenant

I agree completely that you need to stay on top of the eviction process with anyone who doesn’t pay. I have a few tenants right now who are paying their rent but are paying late.  One tenant has contacted me and said she can’t pay the full amount this month. Another tenant actually owes almost $1,000 in water bills because the account keeps reverting back into the company name. That is another whole issue with our local water company! 

If possible, make sure your lease is written so that it specifically lists how any money paid by the tenant is allotted.  You want late fees, tenant charged maintenance bills and past due utility bills to be paid before the rent. This makes any balance due rent that is due which allows you to evict the tenant.

At any rate, I want to evict these tenants eventually because their inability to pay rent on time and in the full amount. Not being able to pay utility bills is another issue as well.  

 

How Can You Work With The Tenant

Sometimes I make a business decision to work with these tenants as much as possible until we get through December. I talk to the tenant and find out what their situation is. Once I know that, I can make a decision about what to do in this situation.  It is not always possible to work with all of them. Communication is key. Listen to what the tenant says and then read between the lines!

Why would I do this?

  1. There are times when I will agree to lower the rent for a month or two. Some money is better than nothing. If the house is vacant, it isn’t generating any money.  The tenant is told this is a short term solution. I explain that I will proceed with the eviction filing if they cannot start paying as agreed in the lease. At this time, I also give them the option of agreeing to move out voluntarily at a future agreed upon date.
  2. A vacant home is also more likely to be vandalized. A vandalized home costs money to repair and it will sit vacant longer. It may be possible to allow the tenant to stay in the house but show it to prospective tenants.  This is only a viable option if the tenant has kept the home in good shape.  I write up a promissory note stating what they owe in back rent and allow them to make payments.  I am not an attorney so find out what the laws are in your area.

 

Sometimes Eviction Is The Only Solution

Obviously, if the tenant will not or cannot make any payments, you cannot work with them.  It may be better to have the home sit vacant for a month or two just to get the non-paying tenant out.  

If you are unlucky enough to live in an area where evictions are not allowed during certain months, be sure and plan ahead.  File immediately on every tenant who is not paying. This puts you ahead of anyone else who didn’t file as soon as they were allowed.  

Do Not Assume A Non Paying Tenant Will Not Move Out

Be pro-active with your non-paying tenants.  I have had good luck getting non-paying tenants to agree to voluntarily move out.  Most people know that having an eviction filing on their credit is a bad thing! Talk to them and see what they need to get out.  Get them a pod if needed. Maybe offer to get a dumpster delivered so they can clean out the house.

These options will cost you some money. However, when you are faced with getting no rent for a few months plus eviction costs, it may be cheaper. This is especially true if you don’t have to pay anyone to clean out the house!

Evicting a tenant in the winter should be the same as evicting a tenant at any other time of the year. Be sure and know the laws in your area. Always consult with an attorney who specializes in evictions.  There is nothing worse than skipping a step and having to start the process over again.