E-Renter News

Sandy is a landlord who regularly checks the criminal and credit backgrounds of potential tenants. She’s noticing a new trend lately: more and more lease applicants show up with credit reports in hand.

While she was impressed that folks were keeping tabs on their own credit records, she was also suspicious and concerned:

• Why were they trying to keep her from running her own tenant background and credit check?
• Was she obligated to accept these credit reports?

Sandy’s first inclination was that the credit reports could be falsified. “It’s pretty easy these days for anyone with computer skills to design a professional-looking credit report. It could be completely made up.”

Her next worry was that the date could be wrong. “The last one I saw said it was only a few days old, but it would  be easy to change the year from 2000 to 2010. It could have been a ten-year-old credit report.”

Sandy’s main frustration was that some potential tenants were insisting she accept the credit reports instead of running her own. As it turns out, she’s probably safe to refuse the self-supplied tenant credit reports. In most states, landlords are under no obligation to accept them. The obvious reason is that they can be easily altered. There are some exceptions, so be sure to check your local and state laws for details in your area.

While frustrated tenants may complain about paying a background check fee each time they apply for an apartment or rental house, it’s a fact that a bad credit history hurts one’s pocketbook. When a credit check comes back acceptable, the next step is to sign a lease. Only the negative reports require tenants to apply for another lease at another rental property, and pay another fee. The cycle is difficult to break, but it doesn't obligate landlords to accept a tenant’s own credit report.

Seems like the words “Mad Men," "Oprah" and “Lindsay Lohan” are everywhere these days—even if you’re not the type to follow the gossip magazines! And true to that sort of sensationalized journalism, plenty of folks know that just using those names in an advertisement will attract plenty of eyeballs.

When you’re trying to come up with ways to make your rental property ads more appealing, why not borrow from the headlines that everyone is reading or talking about?

Creative ad headlines can be as close as a search on the entertainment section of Google. Who’s making news? How can you turn a name into a headline?

It’s easy! For example, instead of your typical, boring ad like this:

• FOR RENT 3 BR, 2 BA apartment in a great complex. No pets, non-smoking, near the mall.

Try writing one of these creative, attention-grabbing ads:

• The Real Housewives Would Love it Here! 3BR, 2BA in a great complex. No pets, non-smoking, close to the mall and plenty of restaurants.
• Live like Lohan: High-security building now renting 2 and 3 BR apartments!
• Just Like Congress, We Won’t Back Down! We’ll work with you to get you into the apartment of your dreams. 1, 2, 3 BR now renting!
• Oprah’s Dogs Are Welcome Here! Pet-friendly single family 3BR, 2BA home, close to parks and trails.
• Live like a “Mad Man!” 2 BR condo for rent, luxurious amenities and the view you’ve been looking for!

Try jazzing up your For Rent ads—it can’t hurt to stand out from the crowd!

As a landlord, you probably do your best to keep your properties safe. But what if you overlook a loose railing and a tenant’s child falls down the stairs? How about the visitor who trips on the sidewalk leading to your building? Or the mail carrier who is bitten by a tenant’s dog? In each of these cases, it could be determined that the landlord is partially or fully responsible for injuries.

Before you decide whether or not you need liability insurance, ask yourself a few questions:

• How will my kids go to college if their college funds are wiped out?
• How will I tell my family we have to sell our home?
• Will I be able to retire if my retirement funds are depleted overnight?
• How much of my assets am I willing to risk?

If these questions make you nervous, then liability insurance could bring you peace of mind. Every day, landlords are sued for damages—and if an injured party thinks you have assets they can go after, they might file suit even more quickly.

On the other hand, if you have nothing to lose, you could continue without liability insurance. But remember, your rental property is an asset, especially if you own it outright or have a great deal of equity. So even if your bank accounts are low, consider the pain of losing your property in a lawsuit.

In some instances, forming an LLC is a way to protect yourself. Holding income property in the name of the LLC keeps them completely separate from your personal assets. It’s best to consult your attorney for specific information about your personal situation.

After you talk to your attorney, call your insurance agent and explore your options for landlord liability insurance. It might not cost as much as you think to obtain a great deal of protection—and peace of mind!

Landlords need to collect confidential information from their tenants in order to determine whether or not they qualify for a lease. A tenant’s employer, bank account numbers, credit history, social security number and previous addresses are all valuable to identity thieves.

In addition to credit information, landlords often know a great deal of personal information about their tenants—often, more than they really need to, including marital status, job situation, housekeeping habits and sexual orientation. It might seem like a no-brainer, but it’s a landlord’s responsibility to keep every tenant’s personal and credit information protected.

In most states, in fact, it is illegal for landlords to release any financial information about a tenant or prospective tenant to a third party without written consent. And as it becomes more prevalent, a landlord should take extra precautions to protect tenants from identity theft.

How to Keep Tenant Information Confidential

• Keep all tenant records under lock and key. If you have a property manager, decide whether they need access to confidential tenant information.
• Protect computerized tenant files as closely as you protect your online banking sites. If you don’t have a password on your computer, you should at least have confidential files password-protected. Change your passwords often.
• Don’t talk about tenants to other tenants. It’s too easy to fall into the habit of gossiping, and before you know it—you’ve disclosed confidential information. Talking about tenants is unprofessional and could land you in hot water.
• If your office is accessible to others, take care when working on tenant files. Don’t leave lease applications or credit reports where they can be seen by anyone.
• When transporting files from one place to another, consider a locking briefcase. It’s one more layer of protection for sensitive information.

Remember, as a landlord, you are privy to personal—and potentially harmful—information about your tenants. It’s a big responsibility to keep it safe and to maintain confidentiality—but it’s part of your job.

Whether you’ve purchased a property solely as an investment or have been forced into renting a home you couldn’t sell, the basics remain the same. Three important aspects of owning rental property begin with M, so they’re easy to remember: Maintenance, Marketing and Making a Profit.

Maintenance: Keeping a rental property in tip-top shape can be a huge burden—especially when you let things go longer than you should. Regular maintenance and upkeep can make this chore much easier. If you’re a do-it-yourselfer, it’s a good idea to keep a tool and maintenance kit in your vehicle so you can stay ahead of maintenance issues before they become big problems. Tightening up a railing before it breaks and injures a tenant can save you thousands. Gluing down a loose floor tile can prevent it from breaking completely—or causing someone to trip on it. And trimming the shrubs in front of windows can help keep your tenants safer. If you live a distance from your rental property, hiring a handyman to take care of it might be one of the best investments you can make.

Marketing: It’s not enough these days to put a “For Rent”sign  in the window of your rental property. If you want to keep vacancy high, you’ll need to be more marketing savvy than that! Most renters look online for their next home or apartment. And if your property is not listed online, you’re reducing the number of potential tenants by a huge number. It’s easy to take digital photos and create a compelling ad. Craigslist, Apartments.com, HousesForRent.com and Rent.com are all great places to list your rental property. Check them out determine which fits your needs best. Remember that when taking photos of your rental property, open the blinds, turn on lights, and be sure to include closets and other storage areas. Your ads should highlight not only the basics (number of bedrooms and bathrooms), but also the features renters want—like wood floors, decks or patios, appliances, walkability of the neighborhood, and nearby parks and trails.

Making a Profit: It’s easy to forget that a rental property business is indeed a business. If you’re not clearing a profit each and every month, you must take stock and determine why. Simply put, you’re either not bringing in enough income or you’re spending too much on expenses. If you can raise rents without hurting your vacancy rate, you should consider it. Check the market rents in your area to be sure you’re not pricing your property out of the range people are willing to pay. If your expenses are too high, analyze where you can cut them. Are you paying a rental property manager? Do you have an expensive landscaping company? Can you start taking care of the lawn and minor repairs yourself? Or are you allowing tenants to slide by or pay the rent late every month? Cash flow will keep your rental business healthy—and a lack of it can sink it very quickly.

New York City landlords and property managers must now provide potential tenants with a new disclosure form that reveals whether bed bugs have been reported in a rental apartment or anywhere else in the building. Similar to mold and termite disclosures used in home sale documents, the form is signed by both landlord and tenant.

The idea is to give tenants an out before signing a lease. Bedbugs have been found increasingly in New York and are spreading across the country, as we reported in a recent blog post. And as more tenants become aware of the problem, more are inquiring about the presence of bedbugs in the apartment they’re about to move into.

Some landlords are not happy about the form, saying through a lawyer that the language is too broad and there is no distinction made between the appearance and treatment of a couple of bedbugs and “incredible infestations.” On the form, landlords are required to state whether bedbugs had been found in the previous year and whether or not an attempt to eradicate them was made.

One broker reports that about half of all apartment-seekers mentioned bedbugs. Bu the city says the number of bedbug reports to the 311 hotline fell by 13% so far this year. That could be good news, although without a sure means of controlling the blood-sucking bugs, it’s not likely they will be going away for some time to come.

While bedbugs are enough to scare some renters away from a building, the vacancy rate in Manhattan is at 1%-–so they fact remains that renters there don’t have a lot of choice.

Whether bedbugs have come to your city or not, it’s good to know what’s happening in other rental markets. Start planning your bedbug battle strategy before they hit!

News articles and television series frequently feature people with a disorder known as compulsive hoarding. It is defined as the acquisition of and failure to discard a large number of seemingly useless possessions to decrease stress and anxiety. Compulsive hoarding and cluttering are features of depression, attention-deficit disorder, obsessive-compulsive disorder or other mental illnesses, according to the experts.

The Dangers of Tenant Hoarding
Landlords typically learn about tenant hoarding through routine inspections or complaints from tenants. While many mental disabilities do not affect other tenants, hoarding is an exception. Piles of clutter can prevent any attempts to keep a clean rental unit. Spoiled food attracts bugs and rodents, with the health hazards they go with them. Boxes and papers are fire hazards. Odors emanating from a hoarder’s residence can affect quality of life for other residents.

A Hoarding Tenant’s Rights
Landlords must be aware that certain disabilities qualify for reasonable accommodations under the Americans with Disabilities Act (ADA). Depression, head injuries or strokes can lead to conditions where a tenant cannot physically dispose of possessions, cannot decide what to keep or what to throw away, or cannot remember where things are kept. After a time, things begin to pile up until you cannot open the door or walk through the room. Before damage is done to the rental property, a landlord can require the tenant to take care of the situation. Under the ADA, a disabled tenant can ask for reasonable accommodation—which does not include leaving the situation as it is. A reasonable accommodation would be to give a tenant a certain amount of time to dispose of the items making the unit unsafe. Landlords may ask tenants for a physician’s documentation verifying the disability.

A Landlord’s Rights
If the hoarding tenant does not clean up the property, it is generally within a landlord’s rights to start eviction proceedings. Check with your legal advisor for the regulations in your state.

More and more rental property owners are allowing pets in their residences. For some, it’s a matter of keeping rental units filled. Saying “yes” to pets gives properties a leg up on their competition. For others, allowing tenants to have pets is a humanitarian act. Since pet shelters nationwide are reporting increases in pets abandoned due to the U.S. foreclosure crisis, landlords who allow pets are helping to keep additional animals out of shelters and with the families who love them.

Screening pets is sort of like screening tenants—except it’s perfectly acceptable to discriminate against certain types of pets, like reptiles; certain dog breeds, like Doberman Pinchers; or certain traits, like aggressiveness. When you're the landlord, you can establish any guidelines—even prohibitions—that you choose.

Here's how to screen pets for rental housing:

Don’t rent to a pet you haven't met: You can tell a great deal about the pet owner by observing the pet. A well-groomed and well-behaved animal is a reflection of the person who cares for it. Conversely, a tenant with a dirty, matted and ill-behaved dog is not a responsible pet owner—and might not be a responsible tenant, either.

Interview the pet owner: Don’t just have them fill out a pet application—although that’s an important part of the process. Ask questions and listen carefully to how the prospective tenant answers them. Make sure you ask:

• Does the pet have any behavior problems? If so, how does the tenant deal with them?
• Has the dog been through training class?
• Does the cat use its litter box?
• Has the animal been spayed or neutered? This is important because unneutered male animals can be more aggressive and unsprayed females will attract unneutered males from miles around—both can be real problems in rental housing.

Check references: Ask for health certificates from the animal’s vet. Responsible pet owners take their pets to the vet for regular checkups, so producing vaccination records should be no problem. Ask about the pet’s behavior at previous residences when you conduct your due diligence on the tenant.

Require flea and tick treatment: Ask the prospective tenant how often the animal is treated for fleas and ticks, and include a provision in the lease where they agree to regular treatment.

Schedule an inspection for two weeks, one month, and two months after the tenant and pet move in. A responsible pet owner will not mind regular inspections—it’s worth it to be able to keep their beloved pet.

Many landlords find that responsible pet owners make some of the best tenants. So don't be afraid to start allowing pets in your rental housing--with proper pet screening, of course!

Jackie has been a landlord for almost fifteen years. She’s had her share of challenging tenants, but overall, she’s thoroughly enjoyed running her rental property business and watching her investment property portfolio grow.

Laurie and her family had been living in one of Jackie’s single family rental homes for the past three years, and her lease was coming up for renewal. Jackie was surprised when Laurie approached her to say they had to move at the end of the lease.

Why? They needed a break on the rent.

Like many families, Laurie and her husband suffered a job loss along with unexpected medical expenses. Luckily, Laurie’s husband found another job, and the couple feels like they will soon be in good financial shape again. But to cover their medical expenses, they needed to pay less for rent.

Because she runs a tight ship, Jackie approached this from a purely business standpoint. Laurie was a fantastic tenant, who always paid rent on time and never caused a problem. They had a respectful working relationship. Jackie didn’t want to lose Laurie as a tenant. She asked what rent they could afford, and was surprised when Laurie replied that they just needed to reduce their rent by $150 per month, from $1550 to $1400.

Jackie knows the comparable market rents in her area. She knows that this home was above the average market rent. She also knew she had “wiggle room” because she has no mortgage payment to cover.

Jackie did the math, comparing the loss in rent income to the expenses she would incur if Laurie and her family moved out:

• Reduced rent 150 x 12 $1800
• Cleaning fee $ 150
• Carpet Cleaning $ 150
• For Rent Ads $ 60
• Loss of Rent Income $1550

The total for loss of one month’s rent, cleaning fees and advertising is $1910. That’s more than it would cost to reduce the rent for one year by $150 per month! And it doesn’t include any additional repair expenses or additional rent loss if it took longer than one month to find a qualified new tenant .

Jackie made the decision to reduce Laurie’s rent by $150 per month for one year. She gained even more loyalty from a grateful tenant, while knowing she’s not out any extra cash.

Landlords must know the guidelines of the Fair Housing Act (FHA), passed by Congress to prohibit discrimination in housing—including rental housing—based on religion, race, color, national origin, sex, family status and disability. Tenants who believe they have been discriminated against can bring charges against rental property owners, even if the property owner did not intend to discriminate.

Advertising is an area that landlords must pay attention to. Ignoring the guidelines of the FHA, whether intentional or not, can get you in hot water very quickly. Here are a few examples of possibly discriminatory advertising, and how to avoid it.

1. Single family house, ideal for couples with children.
Could be discriminatory because it sounds as if couples with children are preferred.
Avoid discrimination by sticking to the facts:
Single family house, 3 BR, large back yard.

2. Upstairs apartment for rent. No smoking, drugs, or children.
Discriminatory because it prohibits children. Unless the property is designated “55 or over,” or another adults-only designation, landlords cannot prohibit children.
Avoid discrimination by opening the listing to children:
Upstairs apartment for rent. No smoking or drugs.

3. House for rent. Good neighborhood, close to Faith Christian Church.
Discriminatory because it could indicate preference to one religious group.
Avoid discrimination by eliminating reference to church:
House for rent. Quiet neighborhood, walk to grocery store and schools.

4. Now leasing 2 and 3 bedroom units. Great views, close to hiking trails. Walk downtown. Great for runners, joggers.
Could be discriminatory by implying disabled people would not be welcome.
Avoid discrimination by eliminating last sentence and adding "bus":
Now leasing 2,and 3 bedroom units. Great views, close to hiking trails and bus lines. Walk or bus downtown.

More ways to avoid charges of discrimination:
Eliminate any symbols from your advertising—except for the Equal Housing Logo.
Concentrate on describing the property, not the potential tenants.
When using photos of people in ads, make sure to show a wide range of people, including different ages and races.