by Debbie Vornholt | Aug 30, 2021 | Landlord
Stop Your Rental Property From Being Stolen
It can be a huge relief to finally get your rental property ready to list and rent. It doesn’t matter if it has taken weeks or months to get to this point, you are ready to be done and get a new tenant into the property to pay the rent.
You craft the perfect rental listing ad, create an informational flier and get ready to get phone calls about the property.
Somewhere out there, someone sees your great listing online and steals it. They usually take the entire ad, lower the price and re-list it under their name. They start getting calls about the rental property instead of you.
This person usually uses a burner phone or better yet, only communicates via text or email. They tell the interested renter some story about how the previous tenant moved out and didn’t leave a key. The person who stole your listing tells the interested people to go drive by the house and see if they like it. If they do, this scammer tells them he will hire a locksmith to get them into the property once they sign the lease, wire the full security deposit and first month’s rent to them.
Some would be renters are smart and don’t fall for this. Other would be renters are desperate to find a place to live and don’t question it. They follow the directions of the scammer and unless you catch them in time, they move into YOUR property!
I personally know 4 landlords that this has happened to and I have heard of countless other landlords who fell victim to these scammers. These landlords are then left with someone who has moved into their property and they don’t have a lease with these people or the money the tenant paid to the scammer. The rental amount is usually about half of what the actual rent was and the people who moved in usually can’t afford the higher rent. Often, they have bad credit too.
The tenants who have been scammed don’t want to move because they signed a lease and paid the money to move in. If you are lucky, you can work something out with these tenants but that is usually not the case. Assuming you can’t work something out, the only recourse the landlord has it to take them to court and have them evicted. This takes time and there is no way to make these tenants pay you.
Tips To Prevent This From Happening To You
Over the years, I have had several of my listings stolen. It is very frustrating to say the least! But, luckily, I have never personally had to deal with someone who has actually moved into my listed property.
I got very pro-active and started making sure that the company name and all of my contact information is left all over the house.
- Create an information flier with company name, my name and all contact information.
- Tape my business card by every flier on the doors and windows.
- Also tape this information flier to every door and several windows on the inside of the house.
- Leave a stack of information fliers and business cards on the kitchen and bathroom counters.
- Leave business cards in a couple of the kitchen drawers and cabinets.
- State that the locks are not to be changed!
This so far, has stopped my listings from being stolen. I have received calls from a lot of interested people who said they talked, texted or emailed with so and so about this house (not me). They were told to go to the house and look around to see if they liked it. If they did, that person would get the lease to them. Usually, they were told the landlord was out of state so couldn’t be there to meet them personally.
Imagine their surprise when they show up and see the fliers all over the property. It also lists the correct rent amount so they call me, shocked that the price has usually doubled! Most of them are grateful that they didn’t get caught in this trap. Some try to negotiate the rental price down. Every so often someone is angry that they were mislead and they direct that anger at me!
However, because I had clearly stated who was renting the property and how to contact me, none of them signed the bogus lease and paid fees to someone who wasn’t me!
Also, my hope is that if a locksmith showed up to change the locks, they would call me before actually changing the locks. I make sure that the flier states that the locks are not to be changed.
These are some simple tips to help lower the chance that your rental listing will be stolen and rented to someone you did not approve.
There are no winners in a situation like these. Even the tenants have been scammed. They should have know that something that seemed to good to be true was too good to be true. But many of them are just too desperate to find a place to live and over look the weird vibes. Also, the scammers are usually very practiced and skilled at presenting a believable story.
I would be interested to hear if you all have any tips for helping to stop a listing from being stolen. Or, if you have become a victim to a situation like this, how did it turn out?
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by Debbie Vornholt | Aug 19, 2021 | Landlord
Rental Income Guideline
A rental income guideline is imperative for every landlord to have. Have you ever talked to a prospect and just loved them! They seem to check all of the rental criteria guidelines but one – the MOST important one.
The one guideline they don’t meet is the rental income guideline which is having income of 3x the rent.
For me, this is a Pass – Fail question. There is no wiggle room. If this prospect does not meet my income requirement of 3x the rent, I will disqualify this person.
Are you still with me? Yes, I know that it is pretty easy to sit here right now and tell you that. It seems drop dead easy to say and many of you may agree with me.
But, I am the first to admit that it can be really difficult to turn down a great prospect who doesn’t have the right income. If you are lucky enough to run across a prospect who is great in every way but the income requirement, you may be very tempted to just go ahead and rent to this prospect.
I mean after all, they are awesome! How can you turn someone like this down?
My response is, very easily.(and yours should be the same by the way).
You may think you are doing this prospect a favor by renting to them but you are not! By renting to someone who doesn’t meet the income qualification, you are basically taking away their financial stability.
Cost To Live
Every prospect needs a certain amount of money to live on every single month. You will quickly find that many of them do not know how much their lives cost on a monthly basis. Your rental income guideline can help them not make a terrible mistake. They may be doing great right now and seem worth taking a risk on. But when you add the rent, you may be sinking their financial boat and yours as well, because you all are now linked together.
Imagine you meet them and their financial history is like a well balance boat. What happens when you add too many bricks to that boat? It will get lower and lower in the water and will eventually sink. That is what will happen with someone that you approve when they don’t have income of 3x the rent. Their boat may float along just great for a little while but will eventually end up under water. These tenants will have been set up to fail.
Where Is The Cut Off?
The problem is, if you make an exception, where is the cut off? I have this discussion all the time with landlords who say, well, this prospect is only $25 short, $50 short, $100 short, etc. Again you already have a rental income guideline and if the applicant doesn’t meet it, where do you draw the line and tell this person that they don’t qualify? Is it $25, $50, $100 etc.?
Keep in mind that I manage a lot of properties and in some I have “inherited” the tenants. I have had tenants tell me that they can’t drive to my office because they only have $25 or $35 or $50 and they can’t afford to put gas in their vehicle until they get paid.
What seems like a minor amount of money to you, may mean the difference in a prospect eating or not.
Co-Signer And The Rental Income Guideline?
You may say well, what about a co-signer? My response is going to be that a co-signer doesn’t help someone pay. A co-signer is not going to guarantee that the person you rented to has enough money that month to cover the rent and all of the other expenses.
The co-signer is the fall back person when when your tenant doesn’t pay and you have another person to collect from. This person is really just an emergency back up plan. The co-signer is most likely not planning on chipping in on the rent every month to make up the deficit. Leases don’t really work that way.
Unless you are going to put in your lease that:
- Rent is $1,000.
- Tenant will pay $950 each month.
- Co-signer will pay $50 each month.
How many co-signers do you think will agree to this? I would wager that not many will. A co-signer doesn’t benefit the tenant when this person doesn’t have enough money to pay the rent every month. A co-signer doesn’t help your applicant meet your rental income guideline.
A co-signer is not really an option for someone who doesn’t make enough money.
Life Happens – Even After This Tenant Moves In
You have rental income guidelines for a reason. Stop and consider what would happen if this prospect wrecks a car, buys a new(er) car, has some hospital bills, etc. All normal things that happen in every day life. This prospect’s income deficit will only increase. When that happens, do you think you will get paid in full and on time every month?
Doubtful.
When that happens, it is the landlords fault. You – the landlord – have set this person up to fail. It may happen sooner or it may happen later but it will most likely happen.
This is not a rule that I will bend because it is not in the best interest of the prospect and it is also not in my best interests.
Remember that your decisions affect not just your life, but the lives of the people you either rent to or turn down.
Sometimes the kindest and best thing you can do is to tell this person that they are great, their credit is great, their job is great but they just don’t have the income and you can’t rent to them right now.
Memorize these words and use them often. “Company policy” requires income of 3x the rent.”
You can add any other words that you desire for empathy.
- “I am very sorry, but your income is not quite 3x the rent and company policy requires that. “
- “I am sorry but the income requirement is company policy I can’t make any exceptions.”
Remind them that it is in their best interests. I have had cases in the past where I was able to switch this person to another property. Then, down the road, when they earned more money, I was able to move them into a bigger property.
Your job is to put a tenant in the property who can pay the rent on time, every month in full. That isn’t going to reliably happen when someone doesn’t meet the very basic income requirement
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by Debbie Vornholt | Aug 13, 2021 | Landlord
Problem Applicants and Emotional Manipulation
As a landlord, have you ever been or felt like you were emotionally manipulated by a prospect or application who had too many issues to qualify to rent from you?
If you haven’t had this happen to you, you are lucky. Emotional manipulation is a tool used by prospects or applicants who know they have a bad enough issue or too many issues to qualify to rent a property. They desperately need a place to live and their goal is to guilt you into renting to them.
Dealing with these people can be emotionally exhausting and can leave you questioning whether or not you are a good person. These problem prospects and applicants know this! They have a game plan that works a lot of the time and they are really good at what they do. Remember, if you rent to these people, the emotional manipulation or blackmail will just continue.
How This Starts
- You are my only hope!
- I just need a second chance!
- None of this is my fault and I can’t catch a break.
- This will never happen again!
How It Ends When You Turn Them Down
- Blaming you for all of their problems.
- Disbelief that you won’t take a chance on them.
- Threats sometimes.
- By saying NO, You STOP this verbal abuse from continuing.
- You move on and find a great tenant who won’t act this way.
How It Ends When You Succumb To Their Emotional Blackmail
- They pay on time at first, if you are lucky.
- Rent starts being paid late.
- The excuses start.
- Begging to give them time.
- Tenant stops answering phone calls, texts, email and won’t answer the door.
- Eviction process starts.
- Might pay something to stop the eviction.
- Get behind again.
- Eviction filed again.
- Finally evict the tenant.
- Tenant has left a mess that will cost you more money.
- You are angry, stressed and out a lot of money.
Things To Remember
Remember that this is a business. It is your job to take care of your asset (the property) and to collect the rent. Your job is to avoid making a bad business decision which would be to rent to these people who do not meet your guidelines. It is not your job to help these people out, to fix them, give them a second chance or rent to them.
You need to stop the cycle and move on!
The key is to quickly identify these people and not allow them to treat you in this manner. You will notice that they will be desperate to connect with you. As soon as you realize what is happening, stop communicating with these people. Tell them clearly, in writing, that they do not meet your guidelines and move on. Refuse to “get on the phone with them”. That is how you end up going down that dark hole where they convince you that you are a terrible person for not renting to them!
Limit Your Contact With Prospects
Try to nip some of this in the bud. One thing that try very hard to do is to limit how much I talk to prospects on the phone. I have a pre-screening process and that includes a list of pre-screening questions that I email to every prospect who wants to tour a property. It is much easier to tell someone in writing that they do not meet your screening guidelines and you will not be able to show them the property.
If I do get stuck on the phone with a prospect I go through the questions verbally. Once I hit a disqualifying issue, like income for example, I stop and say “I am sorry, but company policy requires income of 3x the rent.” When they start with “Well, can’t you make an exception . . . “ I say “I am sorry but I am not allowed to.” Them quickly move to get off the phone. If you have to say, “I am sorry but someone is standing here that needs to talk to me. Have a great day!” Then hang up the phone.
When you can identify these people in the pre-screening stage, you don’t end up standing in front of them showing them the property. Your goal should be to only meet people who meet some very basic minimum guidelines. These people won’t have the chance to tell you about their challenges and sad stories because you are not going to meet them at the property.
Better yet, I go one step further and once someone has met my pre-screening guidelines, I call them up, introduce myself and explain that I am going to text them and ask for a copy of their ID. Once they text that to me, I will give them the lock box code to tour the property on their own. This works well and I don’t get stood up waiting on people to show up. They go on their own time table and no one is waiting for them to show up. Just be sure and rotate the lock box code often.
Have A Support System
Have a support system that you can reach out to. I am a rule enforcer and I won’t apologize for that. You need someone you can call for support who understands rules and why we have them. We all need someone that we can vent to. Even when you know you are making the right decision, sometimes you just need someone to tell you that you made the right decision. This can be especially true if you have a spouse or a partner telling you that you should have considered bending the rules. Often times, one of you has to be the rule enforcer and you know that if you are the rule enforcer, it is not fun and it is not easy.
Tenants Behaving Badly
I also have a few current tenants and several past tenants who started behaving badly. Usually this behavior starts when they cannot pay their rent or you tell them to stop doing something. They will call you names, swear at you and threaten you. They are outraged that you have the audacity to tell them that they owe money. Some of them threaten to get an attorney and sue the company. Of course, they never do because they have not grounds to sue and they don’t have the money!
Set the ground rules quickly with these tenants. Do not allow them to talk to you this way.
Tenant Case Study
I have one tenant who thought it was ok to come to the office and yell at me in person about a light bulb that had gone out. She was mad that maintenance had not shown up within the hour to replace it!
The first time she did that, I was so stunned that I just listened to her. I have been yelled at on the phone a lot of times over the years but never have I had a tenant come to the office for the sole purpose of doing that. After she left, I thought, what the heck! I texted her and told her that was not allowed to come to the office and demand that I do anything.
She was very determined that no one was going to tell her what to do and showed up again about two weeks later. I have a glass door that is locked and I talked to her through the glass door but refused to let her in until she told me what she wanted. Her issue was that her mail box had been run over. She loudly and rudely demanded that maintenance get over there that afternoon to replace it. She kept insisting that she needed to come in to talk to me about it. I didn’t see the point. I also didn’t feel safe.
When I still wouldn’t let her in, she started yelling at me. I turned around and walked away from the door. I called her on the phone to tell her to leave and she kept yelling. I ended up hanging up. I texted her, while she was standing outside my door, and told her that her behavior was unacceptable and that she was not allowed to talk to me that way. I also told her not come to the office again for any other reason than to drop rent in the drop box. When she refused to leave, I threatened to call the police and she finally left. I am on the second floor so I locked the first floor door as well so she couldn’t get to my office door.
I thought I had solved the problem. Unfortunately, I found out a few weeks later that banning her from the office wasn’t enough. She just started calling me on the phone, always about very minor things, and just screaming at me. In addition to banning her from the office, I refused to talk to her on the phone.
I found out that she had been treating maintenance this way as well and I told her that was going to stop. She was informed in writing, that the next time she treated maintenance badly, they would not be back and she would have to hire her own contractors and pay for it.
This tenant is now only allowed to communicate with the office via text, email, regular mail or after hours by leaving a voice mail. She was informed of these options via text, an email, regular mail and a certified letter. Yes, that was over kill but she is impossible to make happy.
I am tired of her and her verbal abuse so, when her lease is up in a couple of months, her lease is not going to be renewed. She has already been verbally warned that we are not renewing her lease and that set her off again.
Do Not Let These People Abuse You!
This is an extreme case and I am not sure what the heck is wrong with this woman. The bottom line is that you do not have to accept this kind of behavior from anyone. You have options and none of them are to allow anyone to treat you badly. This is a business and these people should not harm your mental health. There are other tenants who will behave and not act like this. Find a way to remove the bad acting tenants from your property. Be very sure that you do not knowingly rent to someone who will use emotions to manipulate you just because you feel sorry for them.
Free Training – How To Sidestep These Emotional Manipulators
Watch this FREE video on how to avoid these bad tenants.
Connect With Me
Do you have a story about prospects, applicants or tenants behaving badly? I would love to hear about it! We are all in this together and it is great to hear how other landlords dealt with these issues!
You can connect with me on my blog at Commonsense Landlording.com
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by Debbie Vornholt | Jun 1, 2020 | Landlord
Calculate Debt To Income
When screening applicants, do you use calculate the Debt To Income ratio?
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 601.
Calculate The Debt To Income Ratio
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.
When I ran the numbers, 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.
When you calculate the debt to income ratio, you get a better picture of what the applicant can afford.
