The first contact with your tenant actually sets the tone for your entire relationship. It occurs when you show them the house … they loved the ad they saw on Zillow or elsewhere, loved the pictures, and the price fit their parameters. When I meet with potential renters, I let all of them know what’s expected of our tenants, mainly:
- We expect you to pay rent in a timely manner
- We strictly enforce late fees and file eviction for lease violations
- We expect you to treat this home with loving care
With those things in mind, if someone moves in and is late with rent, they know we aren’t going to let that slide. Early on, I tended to let things go, and accept late rent with no late fee attached. Tenants caught on to this quickly, of course! Why the urgency to pay on time if there’s no penalty for paying late? I learned the hard way, of course ….
Now, I stick by my lease, which demands a 10% fee if I don’t have the rent by the 6th day of the month. If someone has to pay that late fee one time, they make sure it doesn’t happen again. Those fees can be hefty, especially on higher end rentals.
Moral of the story? Be kind, but be firm and stick to your lease terms. At the end of the day, it’ll create a calmer environment for you AND your tenants!
According to apartmentlist.com, In the US alone, over 5.2 million renters have been victimized by rental fraud. Here’s the entire article: http://www.apartmentlist.com/rentonomics/how-common-is-rental-fraud-scams/
Scammers are everywhere, in every industry. As a landlord myself, I’ve encountered this issue over and over again. One case in point:
I had advertised one of my 3-bedroom homes on Craig’s List for $900/month, and a young woman happened to call one day and asked if it was available for $650/month. She had seen it in another CL listing, with my pictures, listed for that amount. The “owner” emailed her and said to send him the deposit and half of the first month’s rent, and he’d have his “agent” meet her at the house with the keys. I told her she was being scammed, and that his “agent” would never show up and she’d be losing that money. She started crying, but was so glad to have avoided this disaster.
Telemarketing and insurance fraud mainly target older people, but rental scams aim at the younger demographic. Renters 19-29 years of age are 42% more likely to have lost money in a rental scam … often over $1-2000! Fake listings, fake addresses, stolen listings (as is the case most commonly here in Indianapolis) … these scammers get pretty creative.
What can be done on the part of the smart consumer? Here are a few tips, also from apartmentlist.com:
- Always visit the property in person and meet the leasing agent.
- Never pay with a wire transfer. Scammers often use this tactic, saying they live out of the country.
- Don’t ever give your SS number or other personal information until you’re comfortable the management co. is legitimate.
- Sometimes the scammers advertise false amenities and features. Make sure the ad matches the true features of the home.
Here’s the detailed article from apartment list.com: http://www.apartmentlist.com/rentonomics/how-to-avoid-rental-fraud-scams/
And remember, if something appears to be too good to be true, it probably IS! Renters, beware!
Yes, it’s all the rage … reality TV shows like Flip This House, Flip or Flop, and even the one filmed here in Indy, Good Bones … they all make it look so easy, right? And the reality celebs reap incredible profits on all the sales. It’s no wonder I get approached fairly often by new investors who want to be flippers. I mean, what could go wrong????
When asked, I tell people the harsh reality of the flipping world:
- When you estimate repairs/updates, there are always unplanned expenses and repairs that pop up. You should always pad your repair estimate to cover those unexpected surprises.
- What if you can’t sell it immediately? What if it sits six months, or even more? You’re still carrying all your holding expenses, i.e. utilities, taxes, insurance, mortgage — slowly draining your eventual profit.
- In a really tight, strong market, like Indianapolis (and many others), there isn’t a lot of wiggle room between what you can purchase a fixer-upper for, and what you can sell it for on the “flip side.” Bargains have gotten much harder to find.
- Several of the HGTV celebrities have started programs/seminars you can purchase, where they’ll lend you money, teach you, get you set up, etc. How well do you think they know YOUR market? And many of their programs are 30K+ — crazy! I’m attaching an article that addresses the “business” of flipping and the pitfalls. It’s a good read.
Flip, Don’t Flop
My best advice would be to contact an experienced local flipper who might be willing to mentor you if you’re super serious about pursuing this route. Flipping houses isn’t guaranteed, steady income, and it isn’t for the faint of heart!
Are you kidding me? How could “IndiaNOplace” be in the running for Amazon’s coveted second national headquarters? How could this former sleepy “Naptown” even be in the conversation? An article appeared in the New York Times recently addressing that very question.
Well, we’re non-partisan about promoting business, with a favorable tax structure. That, coupled with a reasonable cost of living/housing market enabled us to make the final top 20 list of candidates. Here’s the full article that appeared in the New York Times:
Is Indy Cool Enough?
Our award-winning airport makes travel easy, and our traffic patterns are ridiculously smooth compared to other 2M+ metropolitan areas. Fed Ex, who already has a major presence here, has just announced a 1.5B expansion over the next seven years. And we continue to attract hundreds of national conventions each year.
As a local Realtor/Broker, I get inquires from all over about our city. Our market is strong and very stable, and there’s no end in sight.
We may not be the final choice for Amazon, but we’re definitely — finally! — “on the radar.”
It’s all about the golden rule, whether you own rental properties here in Indianapolis or elsewhere — “Do unto others as you would have them do unto you.” Here’s my recipe for keeping my great tenants happy:
- Thank them for tending to the house and keeping it clean.
- Show appreciation for the fact they pay the rent in a timely manner — give them a gift card to a local grocery store or other popular venue, i.e. Target or Walmart.
- When they call with a repair issue, get back with them immediately, not the next day. This shows you care about them and the apartment.
- When they have an issue, even if it isn’t something within your realm of duty (like “The cable’s acting up” or “Our internet’s down, for some reason”, don’t brush them off. Try to offer some options toward a solution.
- When you exceed expectations, your tenants appreciate it. They’ll also share praise of you with other friends/family, often sending you other potential great tenants.
Remember, your reputation is one of your most prized possessions in this business. Providing clean, updated, well-maintained homes is Step 1. Delighting your great tenants is Step 2. And the result? Happy land lording and a happy bank account, of course!
I had a routine I used prior to purchasing all of my Indianapolis rental properties. And now that I’m a Real Estate Broker, I realize I’m giving that same advice to my clients who are looking at homes to buy for themselves and their families. Here’s what I recommend:
- If you’ve found a home that interests you, drive the area at different times of day — morning, mid-day, evening, weekends. That will tell you a lot about the neighborhood activity.
- If you get the chance, talk with a couple of neighbors. They’re a wealth of information.
- Check for crime stats in the area by stopping by the local police station, or going to http://www.trulia.com/crime.
- Check for what amenities are nearby: groceries, schools, parks, restaurants, other shopping, public transportation.
- Pay attention to how well kept the homes are on that street and nearby.
- And of course, look at what the home itself offers, in comparison to others. Is there value there? Are prices rising in the area? Whether you’re looking to rent or buy, it behooves you to be in an “up-and-coming” neighborhood as opposed to one that’s on the down side.
- And if you’re using a Realtor/Broker, have that person run some “comps” for the area, so you’ll know what other places of equal size/amenities are selling or renting for … make sure you’re getting some “bang for the buck!”
Happy hunting! 😉
When I purchase rental properties, I make a point of meeting neighbors, giving them my business card, and letting them know I’m a good landlord. I care about my tenants, my homes and the community as well. The neighbors see that in action as I work to renovate and improve my properties.
All is well and good, until a less than stellar tenant enters the scene. Rick and Tammy (names changed to protect the guilty) moved into the house in April. They checked out well — but unfortunately, good jobs and salaries don’t tell the whole story.
The first police visit was within a couple months. The couple was fighting and Tammy called 911. I was unaware of this, and also didn’t know about the second incident, a couple months later. But when the third altercation happened, one of the neighbors texted me to inform me what had happened. I spoke with Rick and told him if the police were called again, eviction would be filed. (He down-played the situation, of course.)
So when I got a text in mid-December, from the same neighbor, saying there were five policemen in the front yard, along with my tenants, I filed eviction immediately.
We landlords can’t be at our rentals 24/7, so relying on neighbors to keep us informed is a valuable tool. And I also learned, through this situation, that when there’s violence or drugs involved at a rental, you can file for an emergency eviction and the tenants can be evicted within a few days instead of waiting the usual two-week period for a court date. (Good info, but hope I won’t need to use it!)
Onward and upward ……. 😌
Since the collapse in the housing market almost 10 years ago, we’ve seen a steady increase in the demand for rental properties. Here are some startling facts:
- In this time frame, the number of rental units has soared from 34 million to 43 million, in 2015. By 2025, it’s expected to top 46 million.
- The largest percent of that growth — 80%! — has come from the conversion of single family homes into rental properties.
- Demand has grown in all income ranges, but particularly in households earning less than $100,000/year.
- Because of the rising demand, rents are going up, while incomes are not keeping up. Renters are spending a larger percentage of their take-home pay toward their rent payments than ever before. But even so, we’re expecting continued growth in our rental markets throughout the US.
With no end in sight for the continuing demand on rental properties, investors are diversifying their portfolios and putting their monies in real estate. Indianapolis is a very desirable rental market; our economy is growing, yet our prices are reasonable compared to the rest of the country. We have investors from all over the world who’ve decided this is the place to be … especially in the low/middle income markets, there are still great returns to be made.
Onward and upward!
Many employers today turn to Facebook, Instagram. LinkedIn, and Twitter to get the “inside scoop” on applicants. Those social media sites provide a broader view of a person than the bare facts of job history/performance.
Property managers also go to those sites to learn more about potential renters. Facebook, for example, can verify some of the info contained on the rental application. These sites also can provide insight into they type of renter the applicant might be: are there pets not reported on the application? Is the person into throwing wild parties? Are there other lifestyle concerns?
It’s important to know that if you choose to use these sites to help you in your tenant selection, you must use them equally with all applicants, so that you’re not in violation of Fair Housing laws. And another thought — can you be fair about your opinions after you’ve checked out someone on FB or Instagram? It’s very possible their taste/opinions/political or religious beliefs may be drastically different than yours. That doesn’t mean they wouldn’t be fantastic tenants. You have to remain neutral if you decide to use these extra means of screening. If you can’t, maybe just stick with the written application!
I’m pretty open-minded, so I’m going to start using social media as an additional screening tool, if the applicants’ accounts are public. Better screening can help me find better tenants, and I’m all for that!
Onward and upward … 😌
I came across this Zillow article today and was pleasantly surprised. Yes, we know our rental market is strong and will continue to flourish. But for many would-be homeowner/investors who’d like to rent their homes, they find the costs associated with owning that house aren’t covered by the rental income they receive. This is especially true on the east and west coasts, and in many larger cities. But not so with Indy! Here’s the article:
Return on Rent: In Most Major Markets, Most Homes Can Be Rented Out For A Profit – Zillow Research
As this article shows, more than 98% of homes here can be rented out for more than their monthly expenses, i.e. mortgage payment, insurance, taxes, maintenance, major improvements, etc. So, more and more homeowners are considering jumping into the world of real estate investing. And, what better time than NOW?
Onward and upward …… 🙂