Clean-up in Aisle Three …

So, I evicted Brianna and stopped in to check out the house yesterday.  There was trash in every room of this three-bedroom rental, including a few bags of open garbage.  As you can see in the picture below, she owned a broom but maybe just didn’t know how to use it?

She also stole some of the curtains from the windows.  (Glad I buy them at Family Dollar, for about $10/window!)

I had told Brianna what I tell all of the people I evict:  “If you leave the place clean and empty, and you’re out before your court date, I’ll drop the proceedings against you.”   For many tenants, this is an attractive incentive, and they comply.

Brianna didn’t care about that.  She stayed til the bitter end.  She had to be out five days after the hearing (for which she didn’t show up), and she was gone one day ahead of time.   But, just couldn’t quite get everything out:

This kind of thing doesn’t happen very often but when it does, I bring my rake (yes, I said rake!) and 55-gallon trash bags and get the place ready for my next tenant.

Brianna wasn’t behind in her rent.  I don’t allow pets and she had a couple dogs in there. (I discovered this when I was at the house doing some outside work.)  She was evicted for violating our pet policy.  Throughout the eviction process, I was respectful — this is important — and she didn’t leave angry.  The mess she left behind wasn’t due to anger or resentment on her part … she was just a slob.

Brianna was neat and tidy in the early part of her tenancy but things had fallen apart in her life and she wasn’t keeping the place in very good order.  She was on thin ice with me over this before the dog incident … I discovered this fact during one of my periodic apartment checks.

The moral of this story?  Always protect your investment by doing occasional checks of the interior.  And, don’t worry about the stuff you can’t control, like the scenes in this blog piece.  Get the rake and the bags, and get it back up and running!

Onward and upward … :-)

The Works!

I come across some hefty cleaning challenges in my work.  I just evicted some people for being dirty, and went in a few days ago for the clean-up.

Here’s a photo of the bath tub.  I had just begun to clean it.  As you can see, there’s a small section on the left side of the tub wall that looks like new.

It doesn’t show very well in the picture, but the difference is amazing.  I usually use a combination of Krud Kutter spray and Barkeepers Friend for these jobs, but I was out of Krud Kutter.  What I used this time is a product called The Works.  There are a couple different types … I bought the one that’s used for toilets … porcelain is porcelain, right?

I squirted it straight from the bottle onto the tub surface, spread it around to get full coverage, waited a couple minutes and went to work with my dark green Scotch Brite scrubber.  And voila!  The dirt and soap scum came off easily.  Here’s the tub when I was finished.  Fantastic!

A small warning though … this stuff is really strong.  I wore rubber gloves, opened the window for ventilation, and worked fast!  Fortunately, the job didn’t take long at all.

Just thought I’d pass this along.  The bathroom is sparkling.  And tomorrow, I’ll tackle the carpets.

Onward and upward!

Liars and Cheats

It’s unavoidable.  In every business, you encounter people who lie, cheat or steal.  In my rental property business, I try to weed out the scammers quickly.  Case in point:

Sienna moved in a month ago, paying $260 bi-weekly.  She paid her deposit and first two weeks of rent to get in, and that was the last time I saw money from her.  When I didn’t get the second payment in the mail — I give all my tenants pre-addressed, pre-stamped envelopes — I called to see if she’d sent it.  When she said yes, I asked to see her money order receipt.  When she couldn’t produce it, I told her she’d have to pay up or I’d be filing eviction.

Her court date was yesterday and I was shocked to see her there.  Usually, my tenants don’t show up.  Many times, they leave when they see the writing on the wall.  And then I realized her motive.  She had the audacity to tell the judge that she didn’t pay the rent because I was a slumlord and wouldn’t fix anything.  “I had a ceiling leak and I called her and she didn’t call me back.”  She lied under oath!

Wow … I was shocked.  She was partially correct.  She did have a leak, but I returned her call immediately and got it fixed the same day.  So now, I’ll have to attend another hearing, in July, to discuss this issue.  She probably won’t show, but she should’ve known that a leaky ceiling doesn’t release you from paying the rent.  Sigh ….

Fortunately, the judge ordered her out in the usual time frame, five days.  I just can’t wait to see the condition of the apartment.  She was a slob, so I’ll take pictures to document everything.

In my 18 years in the business, this is the first time someone has tried this trick.  I’ve had several tenants try to scam me, but my bottom line remains the same.  I’m in this to make income, and if you don’t pay, you can’t stay.

Yes, there are cheaters and liars in every business.  It’s part of life.  But I don’t have to put up with it, and I won’t.  Sienna will be out Monday, and I’ll whip her place into shape and find someone who will treat it — and me — better!  Onward and upward, right?

Does Eviction Mean It’s Over?

The “E” word.  And in today’s world, the “F” word . . . evictions and foreclosures abound in this economy.  In the early 2000s, people bought homes with little or no money down, and we all know what has happened in the past few years.

So whether you’ve been evicted or foreclosed on, your credit is pretty much trashed, and there isn’t a landlord in the city who’ll consider renting to you, right?  Wrong.

Along with those who lost their homes due to an ARM they couldn’t afford when it came time to pay the higher rate, there are many legitimate reasons people lose their homes and apartments:

  • Personal or family health problems/related hospital bills
  • Being laid off or downsized, loss of job
  • High, unplanned-for utility bills resulting in budgeting problems
  • Loss of second income that helps to pay rent or mortgage
  • Loss of extra income, i.e. child support, SSI, etc.
  • Stolen money, cars or other prime essential belongings

These are all legitimate reasons for losing a home and many times, people are able to rebound and get back on their feet after a few months.  As a landlord, I look at the reason behind an eviction or foreclosure, check out the applicant’s current ability to pay rent, and make a decision based on those things.

Bad applicants tend to have a string of evictions, and always have an excellent excuse to accompany each eviction.  I don’t go there.

Here’s the bottom line:  if you rent to lower-income individuals, you’re going to have some applicants who have an eviction on their record.  And in this economy, evictions and foreclosures are plentiful at every socio-economic level.  So if you refuse to look at someone with “a history,” you may be without a tenant for a long time!

Look at the reasons behind the eviction . . . some are understandable, and some will disqualify the applicant.  You decide . . . go with the facts, and go with your gut.

Collect Rent the Easy Way

Collecting rent is always an issue, with every landlord at every level.  (Show me the money!)   Many landlords I know make personal trips to their rental properties on a weekly, bi-weekly or monthly basis — whenever rent is due — just to pick it up in person.  And somehow, they go home empty-handed way too often.

Sometimes the tenant isn’t even there . . . purposely gone for the day?  Also, the excues are endless:  the employer screwed up the paycheck, the tenant was sick a few days durng the pay period so the check was short, the car broke down so the rent money went to the repair shop, the kids were sick and required expensive antibiotics, yadda yadda yadda.  I’ve heard it all, and I’m sure some of the excuses are valid . . .

The question is, how do you save yourself those repeated, needless trips, especially with the price of gas these days?  My solution has been to give all my tenants pre-addressed, pre-stamped envelopes to send their rent.  Another solution is to set up automatic deposit into your account from theirs, if they have one.  (Some lower-income tenants do not.)

The only reason I go down there to collect rent is when my tenant is “on the chopping block” and it’s a case of “pay up or leave, or be evicted.”  That trip is worth my time.

So . . . back to the excuses.  Some are valid.  Maybe most are.  You’ll never know.  But what you do know is this.  You’re into real estate investing to make money, not to provide people with free housing.  When they don’t pay, you must make a written plan — signed by both of you — for them to get caught up quickly.  If they default on it, eviction is filed immediately.  (That’s part of the written plan.)

Unfortunately, you can’t run this business with your heart.  It just doesn’t work.  Trust me — I tried it, and I nearly ran myself into the ground!  My nonpaying tenants were content, but I was going broke . . . what’s wrong with that picture?  Hmmm . . .

Make your rent collection as easy as possible and remember, if they pay, they can stay.  Otherwise, it’s time to end the relationship.

When to Call it Quits

Landlord/tenant relationships are similar to marriages in some ways . . . The honeymoon period begins when you meet, they look great, their references are glowing, and they move in.  But then, a few weeks or months down the road the bickering begins.  They turn out to be slobs, or they disturb the neighbors with their nightly arguments, or they don’t take care of the lawn, or they’re repeatedly late with rent, and before you know it you’re in counseling . . .

The writing is on the wall.  You know you’re headed to divorce court.  Uh, I mean small claims court.  I have a great, one-page lease and if it’s not adhered to, I get tenants out quickly. 

I prefer to coax them out if possible.  My spiel goes something like this:  “If you can be out by the weekend and leave the place clean and empty, I won’t file eviction on you.”  Sometimes, if they’re really hard up for cash, or if I have a great tenant waiting for the unit, I’ll bribe them out by offering them $100 to be out quickly.  This tactic saves me time, and the eviction filing fee, and saves my tenant the burden of having an eviction on their record.

Even in the best of tenancies, stuff happens and things start looking bleak in your long-term relationship.  People get laid off, their cars break down, they develop major health issues, they get fired, etc.  When this happens with my best tenants, I try to work with them — ask a buch of questions to see if it’s feasible they’ll get back on their financial feet soon — and make a written plan to catch up the rent, which we both sign.  If they don’t stick to it, they have to move.    

When I started landlording, I allowed everyone to stay (dummie!) because I wanted to trust that things would work out.  Well, that didn’t work out so well, as you might imagine!  I’ve toughened up.

At the first sign of a problem, you need to start thinking about calling it quits . . . stay on it, follow through, and move on.  If you’re a good landlord, word will spread.  You’ll find someone else.

Onward and upward!

Hoarder Alert!

I’m just soo glad I have a well-developed sense of humor.  In my job, I often need it.  Here’s a case in point.  My tenant Martha is buying a double from me through a land contract, i.e. rent-to-buy.  Land contracts are a nice addition to real estate investing plans.   Normally, this is a great way for people who have bad credit, or no credit, to purchase a home.  Now, I didn’t know Martha five years ago when a friend recommended her to me.  But boy, do I know her now.  And I’m afraid she has hoarder tendencies.

She’s good about paying me on time — no complaints.  But the inside of her  house is filled with “stuff” and the outside — well, one person’s trash is another person’s treasure, right?

I got a call from the Board of Health last week about her back yard.  (Uh-oh . . .)  I went down there immediately and took this picture:

Yikes!  That contraption is actually a “dog house” for her little dog, but she had filled it with bags of garbage.  (I didn’t bother to check to see if the trash can next to it was empty.)  It’s hard to tell from the picture, but there was also trash and junk to the right of it.  I was really unhappy about this — I’d be the one to get slapped with a hefty fine if the situation wasn’t remedied within about 10 days.  I had a “talk” with my tenant and she cleaned it up to this extent:

So I’ll be having a more detailed discussion with her tomorrow.  I don’t think the Board of Health will feel she’s in compliance at this point.  At least the garbage is gone.  She’s moving in the right direction.

But if she can’t do a better job of maintaining the property I’ll have to begin the foreclosure process.   (This is why landlords should always put clauses in their leases and contracts that allow them to evict if the property isn’t maintained to a certain standard.)  It’s more expensive and involved to remove a rent-to-buy tenant than a regular renter.  Even though she’s good about paying on time, that’s not enough . . . I don’t want to become best friends with the Board of Health folks because of her!

Onward and upward . . . More later . . .

I AM the Grinch . . .

Yes, I am the grinch.  Case in point . . .

I rented one of my places to a very nice single mom, Magda, and her 11-year-old son a couple of months ago.  Magda’s husband was deceased, had died an early death due to diabetes.  As a result, she received government monies and had a part-time job to supplement that income.

Things went well for two months.  She paid on time and kept her apartment in good order.  Then she missed a rent payment.  She was on a bi-weekly payment plan.  She neither called nor wrote me a note about this, so I had to go to her house (my voicemail went unanswered) in hopes of finding her there or leaving her a note.

Fortunately, she was there.  She said her money order had been stolen.  I said, “Well, do you have the money order receipt?  If so, that’s your proof of payment.”  She couldn’t produce the receipt.  When I meet tenants to sign my lease, I urge them to save their money order receipts for this express purpose, just in case the rent doesn’t reach me for one reason or another.  It’s even written in the lease.

Fortunately, Magda had the cash to replace the missing payment.  However, another rent payment was going to be due in a couple of days.  I asked her if she had that money and she said no.  She’d lost her job and hadn’t found another one.  The writing was on the wall . . . I suggested she borrow money from friends or family to get her by, and told her it was important she keep in touch with me about what was going on.

Sure enough, the rent due date came and went and I heard nothing from Magda.  I hoped to get the rent in the mail, but when five days passed and I didn’t receive it, I went to her house again.  There was no one home so I left a very pointed note, stating she needed to call immediately to avoid the eviction process.  (I made a copy for myself as well.)  I also left a message on her phone.

No response.  So, three days before Christmas, I filed eviction.  Her court date isn’t until Jan. 7, because the court shows some leniency over the holidays. 

The bottom line?  Years ago, I would’ve let this scenario play out over a period of months, hoping and trusting that Magda would get her act together.  I have empathy for single moms, as I am one myself.  But I learned (thankfully!) that I can’t run this business with my heart alone; I have bills to pay, too.  So yes, I am the grinch, but it’s for my own sanity and preservation.

 I haven’t been back down to Magda’s place since I filed on her, but she may have abandoned the apartment by now.  Many tenants do, when they know they’re being evicted.  I’ll check it out and keep you posted . . .

Onward and upward!

“I’ll Have the Money Next Week…”

I just filed eviction on someone yesterday.  “Next week” never came.  Marvin had a decent factory job, and the pay was more than enough to justify his tenancy in my one bedroom unit.  He and his wife have been with me for about four months now.   They pay bi-weekly and all the utilities are included in the rent, which is nice for them.  One payment, every other week.  The home in which they live is a four-plex, and none of the utilities are metered separately, so I take an average of what the bills are and add it into the rent I ask for each apartment.  I actually add in more than necessary to reward myself for the extra work involved in carrying these bills for my tenants.  And they’re happy to pay it, because this simplifies their lives.  Works for them, works for me.  Beautiful!

Anyway, back to Marvin . . . he didn’t get his rent sent in three weeks ago and after a semi-threatening phone call from me, he called and said he’d lost his job and got a new one, but wasn’t getting paid til next week.  And possibly, the church was going to help as well, with the back rent.  They’d be calling me.  A woman from the church did call, and Marvin was only $260 behind at that point, but they didn’t come through with the money and neither did Marvin.

So here we are, now he’s $520 behind and I filed eviction.  His court date is in two weeks and Marvin doesn’t want to lose his home.  I totally understand that but I can’t allow people to stay without paying.  Marvin swore he’s sending me $300 tomorrow.

But here’s the catch . . . you can’t accept money after you’ve filed eviction on someone.  So, we’ll see if I get that money.  If I do, I’ll just hold onto it until the court date.  I told him he could stay if he was totally caught up before his court date, so if I receive all of it, I’ll cancel the eviction.  If I don’t get all the money, we’ll go to court and I’ll hand back whatever he has sent to me, and proceed with the eviction.

Here’s the deal.  If you start accepting partial payments, you’re going down a slippery slope with your tenants.  You’re telling them you’ll accept late payments, no payments, partial payments.  It’s a bad deal.  Your lease — like my airtight lease — should be very explicit about nonpayment of rent, late fees and the time frame for filing evictions.  You need to adhere to that lease.

In many cases, like Marvin’s, when the you-know-what hits the fan you need to be somewhat flexible.  People lose jobs, their cars break down, etc., and they may be late with a payment.  I usually try to work with them.  Briefly.  But if they don’t come up with the cash when promised, you need to be ready to jump on the eviction band wagon.

Remember, this isn’t about social work . . . this is about building wealth for your future.

Abandonment Issues

Over the past 15 years, I’ve done hundreds of evictions.  Unfortunately, some tenancies just don’t work out.  People get laid off, lose their jobs, get downsized, get sick, split up with their significant other, etc.  When these things happen, they don’t pay the rent.

Sometimes my tenant will promise to get the rent caught up within the next week or two. When this happens with your own tenants, you must judge the situation by what has happened in the past.  Have they gotten behind before?  Have they been forthright in paying you back quickly?  Do they maintain the apartment well?  If you’ve been happy with them as tenants and trust them implicitly, then go with your gut and work out a plan with them.  But don’t leave it open ended.  Put the plan in writing (signed by both of you) and if the tenant doesn’t deliver, go ahead and file the eviction.

On the other hand, when the writing is on the wall and you and the tenant know the end is in sight, it’s time to cut ties and move on.  I try to avoid filing eviction if possible,  thus saving myself the $81 filing fee and saving my tenant from having an eviction in his/her record.  If they can be out in a few days, I’ll often offer them $50 as incentive.  Dangling this carrot often works.  It gets them out quickly so I can do a quick turnaround and get the place rented.

Times are especially tough right now, and sometimes when people drop behind in the rent, they don’t choose to discuss it with the landlord at all.  They just leave.  This is one of those good news/bad news things.  It’s great to have them gone, which saves  me the time and money of filing eviction.  But it’s not always crystal clear whether they’ve really left or not.  Here are some clues that indicate they’ve abandoned the property:

  • Did any of the neighbors see them moving items out?
  • Is there any significant furniture left in the apartment?  Beds, couches, tables, etc?
  • If they had utilities in their name, are they still turned on?
  • Are their clothes/personal items gone?

If neighbors have seen them moving out, you can bet they’re not planning on staying.  Check out the remaining stuff in the apartment.  Is it mainly junk?  If their clothes are gone and there aren’t any sheets on the bed (if they left it) you’re pretty safe in calling this an abandoned property.  You may want to take pictures, just in case they come back and claim to have left grandma’s priceless china cabinet behind.  (In my 15 years, this has never happened to me but you should always watch your back.)

If you’re unsure about whether they’ve totally moved out, call them.  If you can’t get a response, call the contact numbers you have on their application.  Tell the contact you need to speak with the tenant, and that if you don’t hear from him you’ll have to assume he has abandoned the property.  Give them a date on which you’ll be changing the locks.  When in doubt, just file the eviction and go through the legal channels to ensure you’ll be protected by the law.

Landlord/tenant laws vary from state to state.  You may check them out by going to www.landlordstatelaws.com.   But do try to avoid evictions when possible . . . you’ll save the filing fee and (in IN) two week wait for the court date.  I can usually tell when a place has been abandoned and I’ve never been challenged on the issue.  Look at the details, take pictures, and move on.  A better tenant is just around the corner!    :-)