E-Renter News

Landlords Say Do It Sooner Rather than Later

Landlords are legally entitled to evict a tenant when he or she violates the terms of the lease. The reasons to evict a tenant are numerous, but if the tenant signed an agreement and breaks it, they are subject to eviction.

Here are the top ten reasons landlords evict:

1. Tenant has not paid rent.

2. Tenant regularly pays rent late.

3. Tenant allows illegal activity on landlord’s property, such as drug use.

4. Tenant is engaged in illegal activity on landlord’s property, such as selling drugs.

5. Tenant keeps an unauthorized pet.

6. Tenant caused substantial damage to landlord’s property.

7. Tenant is running a business from the property.

8. Tenant is disturbing the peace.

9. Tenant is threatening others.

10. Tenant repeatedly ignores parking or trash disposal rules.

Landlords must send tenants a notice of termination or eviction, according to the laws of the state in which the property lies. Termination notice requirements vary, so check your state’s laws prior to taking adverse action. Do not attempt to enter the tenant’s unit within the notice period.

In many instances, the tenant is given a chance to correct the infraction before the court date; but in allowing this, landlords can be trapped in a cycle of missed rent/eviction notice/rent payment. If you are intent on evicting a non-paying tenant, do not accept late or partial rent payments.

Landlords sometimes fall victim to professional scammers or tenants who take advantage of them. It can be tempting to believe promises of payment or reasons why the tenant is unable to uphold the terms of the lease that they agreed to. Experienced landlords will advise that when it comes to deciding when to evict a problem tenant, sooner is always better than later. Far too often, bad behavior becomes the norm, and the tenant soon has control in the relationship.

How to Detect and Deal with a Potential Danger

Many landlords and property supervisors we know are very much “hands-on” managers: they take pride in their rental property; and are on site regularly, inspecting and checking on tenants, as well as the physical structure. They know that just showing up can prevent small problems from becoming big ones.

Natural gas leaks are rare, but they can occur at any time on your property. They are definitely a problem that is best handled sooner rather than later! Gas leaks can lead to explosions, because natural gas is extremely volatile in enclosed areas. Gas leaks can also make people very ill.

The next time you’re inspecting your rental properties, keep your eyes, ears, and nose alert to signs of natural gas leaks:

• Check with your ears: listen for any hissing, whistling, or blowing sounds.

• Check with your eyes: look at the ground. If there is a dry patch in an otherwise damp or wet area, that could be a sign of natural gas. Same for dead grass, plants, or shrubs in an area where everything else is healthy.

• If you see dry or moist dirt being blown into the air, there could be a leaking natural gas pipe beneath it. In wet areas or mud puddles, look for bubbles or water spraying into the air.

• Check with your nose: if you smell an odor like rotten eggs or a skunk, it could be natural gas. Not sure what natural gas smells like? Contact your local utility provider and they can send you a scratch and sniff card to help you identify the natural gas odor.

If you think you have discovered a natural gas leak:

• Leave the area on foot—do not start your vehicle. Do not drive through the area. Go upwind of the area of the leak. Get people and animals away from the area of the leak.

• Do not use matches, cigarette lighters, or cell phones—all can ignite the gas.

• Inside a building, do not use door bells, telephones, appliances, or light switches.

• Do not attempt to turn off gas valves. Call 911 and/or your natural gas company.

Prepare to Prevent

Providing secure housing for your tenants is a landlord’s responsibility. Certainly you cannot prevent every possibility of crime, but you can prepare your property to discourage break-ins and other property crimes.

But preventing crime is your tenants’ responsibility, too. Your job is to provide them the means to protect themselves, and educate them on ways to stay safe.

Here are a few ideas:

Window and door locks: This might seem obvious, but strong, working locks on all windows and doors are an absolute must. Do not allow your tenants to change locks. You must be able to have access in case of emergency.

Have a zero-tolerance policy on drug use: Your lease should state that illegal drug use is not allowed anywhere on your property, at any time, by any one. Evict any tenants who break this rule, and your other tenants will see that you do not tolerate it. They will likely appreciate your attempts to keep them safe.

State in your lease whether or not firearms are allowed on your rental property. Check with your lawyer on this one, as you may not be able to prohibit legal firearms. You may certainly prohibit illegal weapons!

Maintain adequate exterior lighting. Motion lights are a great way to provide safety just when it’s needed—and to discourage would-be prowlers.

Make sure doors and windows are not covered by shrubs or trees. Visibility is vitally important—break-ins occur more often when the perpetrator is hidden. If you plant anything near a window, consider shrubs with stickers to make illegal attempts to access more painful!

Tenant screening is the number one way to prevent crime! Increase safety by ensuring that you have law-abiding, honest tenants in your properties by conducting tenant background checks. They and their friends and visitors are less likely to be involved with drugs and other criminal activity. Many burglaries are carried out by friends, visitors, or acquaintances of residents.

Fraudulent Activity is on the Rise

When times are tough, desperation drives more folks into trying to take advantage of others though fraudulent attempts to rent property. If you’re a landlord or property manager advertising rentals on Craigslist.org, you may have received fraudulent emails. Or you might have been approached in person by rent scam artists.

What should landlords watch out for when it comes to rental scams?

Often, rental scammers offer to pay several months’ rent and security deposit up front, before they’ve even met you or seen the property. If you have a potential tenant who insists on sending you a cashier’s check or money order for you to cash, you should see red flags. Cashier’s checks and money orders can be reproduced easily. The lesson: don’t take the “For Rent” sign down until you have a signed lease application in hand, run proper tenant screening, and know that the tenant’s check or money order has cleared your bank.

A similar scam involves distant" tenants" who want to rent sight unseen, and offer to deposit funds directly to your bank account. Their letters of inquiry can sound very legitimate, stating that they are employed overseas, moving back to the U.S. very soon, have great credit, don’t smoke, etc. Then they request your bank account number to complete the wire transfer of funds. Remember to never give out your bank account numbers, even if the promise of several months’ rent up front seems too wonderful to be true—because the scammer has every intention of accessing your funds, not adding to them.

Another prevalent overseas scam involves a phony tenant who offers to send the landlord a cashier’s check or money order for more than the required deposit, with the request that the recipient wire the excess funds to an escrow account or agent. The victim deposits the check or money order, wires the funds, and then discovers the check or money order was a fake. The landlord is out the amount of the phony check or money order, plus the money that was wired.

Sometimes scammers will pose as potential home buyers, who then fabricate a story about needing to rent the property for several months before buying. Their reasons could be wanting to make sure the home fits their needs, because they’re waiting for their previous home sale to close, or to make sure they’re not allergic to the carpet or drinking water. Perhaps since the potential house sale is attractive, many landlords go along with a short-term lease, only to find out the tenants never planned to through with the sale. The scammers hope to find a landlord who lets their guard down based on a good story, and who waives normal tenant background screening procedures.

Finally, be aware of imposters who pose as you, the rental property owner. These swindlers show potential tenants around the outside of the property, take their application and security deposit money, and head for the hills! It might seem implausible that anyone would fall for such a con, but professional scammers are great actors, tell a great story, and make a living by making people give them their money. They’re very good at it!

State Your Expectations and Follow Up

Here are some tips for making rent collection less painful—for you and your tenants.

1. State your expectations: Make sure your lease states very clearly when rent is due, and when it is late. Go over the information verbally with your tenant at lease signing time.

2. Stick to your grace period, if you have one. Keep in mind that many tenants will take advantage and pay rent on the last day of the grace period.

3. State very clearly what the late fees will be for rent paid after the due date.

4. Do not bend the rules. You must treat all of your tenants equally. If you don’t apply the same rules to all your tenants, you could be accused of discrimination against those who do not receive preferential treatment.

5. Help your tenants pay on time: collect it in person. If you don’t feel safe or have the time for collecting rent, consider giving tenants a stack of addressed, stamped envelopes when they sign the lease. A stamp is a small investment to ensure rent is paid in a timely manner.

6. Do not accept separate payments from multiple tenants. Let them collect from each other and pay you with one check.

7. Do not accept partial rent payments. This could make filing an eviction suit impossible.

8. If a tenant bounces a check, do not redeposit it. Require a cashier’s check or money order to replace it. If the tenant provides a cashier’s check, cash it at the bank it is drawn on. And remember, you can legally collect a returned check fee from your tenant.

9. Look into online rent payment. Many of your tenants pay their bills online already, so make it easy for them to pay their rent, too. There are several services available that will handle the transaction for a small fee.

10. Enforce your rent rules: when tenants know you are serious about when rent is due, they are more likely to pay on time.

Set Budgets for Time and Money Invested

Depending on the condition of your rental property at purchase, you could face a little—or a lot—of repair work. And based on the rental income, along with expenses such as property taxes, mortgage payments, and maintenance, the amount of cash you spend on repairs can really affect your cash flow.

Calculate every penny. Putting pencil to paper is a must. It could be that the lower purchase price, down payment and mortgage payments that typically go along with a fixer-upper, even after accounting for repairs, will result in higher cash flow.

Do your homework. Prepare a budget for the amount of money and time you can reasonably invest into repairs. Obtain estimates from a few contractors—then pad them. Look at the amount of time the repairs will take—time that you will not be collecting rent. Consider that weather could adversely affect your timetable.

Determine what repairs you can do yourself. But make sure not to overestimate your abilities! If you don’t know how to tile a bathroom floor well, save yourself the time and trouble and hire a professional. Doing something twice means no profit for you. Again, consider the time factor—the longer it takes you to perform the repairs, the longer you go without collecting rent. If you work full-time and can only rehab your rental property at night and on weekends, the investment spent on a professional contractor could be well worth it.

If you are reasonably handy, have time to do repair work yourself, and can find bargains in materials, a fixer-upper can return more cash to your pocket than a ready-to-rent property. And if the price is right, you might even be able to afford to hire a professional contractor!

Is it Legal to Reject?

If you’re a landlord, you must stay current on federal, state, and local laws that cover access to fair and equal housing. The federal Fair Housing Act prohibits discrimination against tenants based on race, religion, marital or family status, color, national origin, sex or disability. Many states also prohibit discrimination based on sexual orientation.

But what about the tenant applicants who dress or present themselves in a manner you consider inappropriate?  Certainly everything is subjective—some folks can’t have enough tattoos and others can’t stand them. But what the FHA and your local/state government considers discrimination is anything but subjective. You cannot reject an applicant for rental housing if they fall within any protected group.

So are body piercings, loose or revealing clothing, tattoos, and other personal appearance choices considered protected? No. A landlord may reject a tenant for any reason—including clothing choices and body adornments—other than those listed by the FHA and your local and state laws.

Landlords should be cautious, however: if you are rejecting tenant applicants based solely on their appearance, and they are also of a protected class, you could be asking for an accusation of discrimination.

When faced with an applicant whose appearance you just don’t like, but who passes your entire tenant screening process with flying colors, you may just have to adjust your concept of what is acceptable—especially in this market. You might just be surprised that, despite your preconceived notions, the tatted, pierced young person before you is your most pleasant and responsible tenant ever!

Do the Right Thing and Stay Within the Law

Fair Housing laws, both federal and state, cover most rental situations. The Americans with Disabilities Act further obligates landlords to accommodate the disabled so that everyone has access to equal housing opportunities. Here’s what you can do to accommodate disabled tenants and potential tenants:

Make your rental office accessible to those using wheelchairs.

Provide ample parking for the disabled, both for tenants, close to their units, and for visitors.

Provide sight-impaired tenants with large-print documents.

Allow disabled tenants to make necessary modifications to the rental unit, such as lowering countertops, changing door handles to easily operated versions, installing grab bars or ramps; at the end of the lease, you may choose to keep the modifications in place (perhaps for future disabled tenant use), or have the unit returned to its previous condition at the tenant’s expense.

Allow service animals when tenants need them. If you have a “no pets allowed” policy, it does not apply to service animals, which are not considered pets.

Make common areas, such as playgrounds, picnic areas and clubhouse facilities wheelchair-friendly.

Give latitude regarding visitors’ use of tenant-only facilities, such as laundry rooms, when they are doing so to help a disabled tenant.

Supply a sign-language interpreter when conducting meetings with hearing impaired tenants.

Release a tenant from their rental agreement or lease if they become disabled or impaired during the term of the lease and cannot, because of their disability, inhabit the rental unit or uphold the terms of the agreement.

Choose the Right Tenants and Manage them Properly

Landlords love to commiserate on the challenges of renting property—like plumbing leaks, constant painting inside and out, flooring replacement, appliances breaking down, heat and air conditioning systems quitting.

But these are all building issues, and even though they are a big part of the rental property business, they can be managed. The even bigger headaches we hear about come from the people side of investing in rental property—managing tenants and their issues:

• Paying rent late
• Damaging your property
• Breaking leases
• Ignoring the rules
• Making too much noise
• Illegal activity in your rental units
• Eviction hassles
• Cleanliness

Most landlords we know agree that tenant problems are far and above more aggravating than building problems. Perhaps they forgot that the landlord business is first a people business. If you’re not doing a good job of managing your tenants, you might need to brush up on your people handling skills.

And most tenant problems can be avoided before they start, by following two rules: 1. choose your tenants wisely, and 2. manage them properly.

Choosing the right tenants starts with making your property attractive so that people want to call it home. Next, advertising your property with well-worded ads designed to appeal to your target market (without discriminating), and when the phone starts ringing, pre-screen your potential tenants to make sure they can afford your rent. Require a thorough application and let applicants know you always conduct tenant background checks. Screen every applicant, every time.

Once you choose your ideal tenant, communicate clearly—and often. Your lease should spell out exactly what you will and will not do for your tenants. It should also list your expectations from them. Do not let your tenants think you are a pushover, or they will test your limits. Let them know you enforce your lease and your rules fairly and consistently with each and every tenant.

Let your tenants know you are a hands-on landlord, that you will be on the property often to check on things, and that they can always call on you for emergencies or other needs. Give them incentives to stay, and take immediate action if they break the rules or are neglecting their responsibilites.

Where to Find More

What do you do when every applicant you bring in does not pass your tenant screening process? How do you fill a rental vacancy when you can’t seem to find a good applicant?

Try new ways to advertise your rental unit. Be creative. If you’ve always done newspaper advertising, try online ads. Craigslist.org has become the go-to place for landlords to find tenants and for tenants to find homes to rent. Perhaps your area has a community “trading post” type of website where you could also advertise your listing.

Blanket the area around your rental with fliers. Think about the best possible tenants, and put a poster or flier in the places they congregate. If your rental is near a university, post in areas where the teachers and professors hang out. If it’s near a hospital, post a notice in the employee’s lounge. Be sure to obtain permission first!

You can try coffee shops and breakfast places to post your ad, too. And many grocery stores, day care centers, and co-ops have community bulletin boards.

Don’t forget about signage. Put up a new, clean sign that can easily be seen from the sidewalk or street. Don’t be tempted to use a ratty or beat-up sign—if you don’t care enough to use a nice sign, you’ll attract tenants who don’t notice or care about such details, either.  And be sure your phone number is legible.

Try hosting an open house. You can show your rental unit to a number of possible tenants at once—and if your place is not appropriate for any of them, they still might tell their friends and family about it.

Word of mouth is the best form of advertising—so don’t be shy about telling everyone you come into contact with about your vacant rental unit. Your dentist, barber, hairstylist, or the person who waits on you at the hardware store might know the perfect tenant for you.

Just because times are tough and it’s more difficult to find quality tenants does not mean they’re not out there. Be patient, increase your efforts, and keep trying—and you’ll fill every vacancy with quality tenants.