Please Don’t Go . . .

It breaks my heart when I have good tenants that inform me they’re moving.  I so appreciate my good people . . . and I often wonder if I’m doing enough of the right things to keep them with me.

In today’s environment, society is very mobile.  People lose jobs or get transferred, have family, health or money issues that force them to move, and with the economy in this state, people are being laid off right and left.  But the worst thing that can happen to us landlords is for one of our great tenants to make a move because they just want to.

To maximize your length of tenancy with those great tenants, remember this:     

  • They notice when their apartment is being neglected
  • They’re paying a good deal of rent, and they expect prompt service in return
  • They know when they’re being ignored or brushed off, or treated with disrespect

Over time, although you may not hear complaints from these decent people — they’ll likely suffer silently — they will become disenchanted with you and the way you run your business.  Eventually, you’ll lose them. 

And once they leave, God only knows what the next tenant experience will bring, right?  So, why not make a little extra effort to keep your good tenants with you?  Here are a few tips:

  • Be visible, let them see you’re involved (at least partially) in your business.  If someone else manages for you, find out who the “good ones” are and visit or call occasionally to get acquainted.
  • Ask them if everything is working well in the house.
  • See if there are any other issues they feel you need to be aware of.
  • Ask if they have suggestions or questions for you.

If you stop by or call with these questions, your good tenants will see that you care about them, and they’ll feel their livelihood and wellbeing is tops on your list.  And if concerns have been raised by these good people, by all means address them quickly!  I’ve received hundreds of compliments from tenants over the years because of the way I take care of problems in a timely manner.  I guess there are a lot of uncaring or disorganized landlords out there.

Another good question to bring up is, “Are you content here?  Do you see yourself moving in the near future?”  I know you kind of hate to bring up the “M” word with a good tenant, but if you get a response like, “Yes, we’re outgrowing this apartment” you can discuss moving them into one of your larger places when one comes available.    Or, if they find it too hot or too cold in certain weather, those problems can be remedied with inexpensive (safe) space heaters and room air conditioners.  Remember, your good tenants will be too shy to complain about issues that might force a move, so do ask them how they’re doing with their accommodations.  It may help you retain an excellent tenant for several years.

In the event a move is unavoidable, do ask them to spread the word about their apartment becoming available.  Their friends and family may be wonderful tenants as well.

I’ve already mentioned the small gifts or gift certificates I give my good tenants as holiday presents.  Another good thought is to keep a couple nice size space heaters and insulated coolers on hand.  Unfortunately, furnaces and air conditioning units break down from time to time.  When this happens, I quickly deliver the appropriate “back-up” for them to use until their unit is repaired.  This is a kindness they don’t forget.

As I’ve said all along, when you treat your tenants with kindness and respect, they usually respect you in return.  Longer tenancies, happier tenants, happier landlords . . . what could be better?

Onward and upward!  🙂

Keeping Good Tenants

Many investors shy away from owning rental properties because they’re afraid of being landlords.  They don’t know how to find good tenants, they’re fearful about tenants trashing the rental, leaving in the night, running meth labs out of the unit, etc. etc.  In reality, these things don’t happen very often!  The horror stories are few and far between.

If you advertise wisely (See “Finding That Perfect Tenant”) you’re likely to attract decent applicants.  But once you get them in, how do you keep them?    First of all, before you get them in make sure the unit is spotless and everything is in working order.  Check the drains and faucets to see there are no leaks and the water pressure is good.  Do the toilets flush well?   Are the shower heads in great condition?  This stuff should’ve been taken care of before you showed the place, but it’s always a good idea to double check before your tenant moves in.  First impressions are huge.

The most important thing you can do to keep your good tenant is to return his calls, texts or emails promptly.  And promptly doesn’t mean the next day.  When I talk to applicants, I’m always conversational with them, and the biggest complaint I hear about former landlords is this:

“He/she never returned my calls . . . I had to call about repairs two or three times before I got a call back.  And then, it would take three or four days or more for him/her to get someone out to fix the problem.  He/she didn’t care about us.”

Which leads me to the second item . . . take care of repair issues immediately!  My tenants are sooo appreciative of this.  Sometimes a problem can’t be fixed in a day, but when the tenant knows I’m on it, they’re much more willing to be patient with it.

Another thing I always do is announce ahead of time when I’m going to be stopping by.  I inspect my apartments occasionally, to ensure my tenants are taking care of them, and I always let them know ahead of time.  (After tenants have been with you a while, you know which ones need to be visited and which ones don’t, as far as cleanliness issues.)

And lastly — this is common sense but needs to be mentioned anyway — I always treat my tenants with kindness and respect.  When they have guests over, I greet them with a smile, etc. (hey, they could be future tenants).  Landlords who are abrupt and/or present a threatening presence to their tenants get no cooperation in return.

As I get to know my best tenants, I’ll give them little perks from time to time, i.e. small gifts at Christmas, or a gift card to somewhere they like to shop, or an upgrade in their unit I know they’ll appreciate.  Remember, they are your best advertisement . . . and they will build your reputation.

Attracting and keeping great tenants is one of the keys to being a happy landlord!

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!    🙂

The American Dream

Yesterday was a good day.  No, make that a wonderful day.  My tenant Jesus and his lovely family gave me the last payment on their house.  They are now homeowners.  To give you a little background, they first rented from me in 1996, shortly after the birth of their first child.  I was thrilled with their tenancy . . . clean people, excellent payers . . . a landlord’s dream.  They returned to Mexico after renting from me for a couple of years.  In 2000, I received a call from Texas.  They were on their way back to Indianapolis and had saved my number, and were wondering if I could accommodate them, now a family of four.  I happily put them in one of my duplexes.

In 2003, Jesus asked about the possibility of buying the house from me.  His sister lived in the back apartment and they were very happy there.  I sold them the house on land contract.  He gave me $7000 down (in $100 bills!) and we set up the payment schedule, at 9% interest.  For people who have marginal credit or no credit (like Jesus) this is an excellent way to purchase a home.  He’s never been late on a payment and has improved the home in many ways.  Here are a couple before/after exterior pictures:

The interior changes are more dramatic; as his family grew to three children, Jesus made the attic into additional living space and added another bathroom.  It looks professional. 

I explain the ins and outs of land contracts in detail in my book, The Landlord Chronicles: Investing in Low and Middle Income Rentals:

“The major advantages to land contracts are the following: 

  • I don’t have to claim all the profit in the year I sell the property; it’s spread out over the life of the loan (check this out with your tax advisor)
  • I have no responsibility for repairs or bill-paying at the property
  • The buyers are invested in it financially and emotionally, therefore motivated to take good care of it
  • Being the bank enables me to make more money on the sale, through principal and interest, than I would by selling outright
  • Land contracts provide long-term income, with little work involved

I’ve had people in tears after being given the keys to their homes.  These are people who never dreamed they’d be able to own a home.  Although land contracts are a great moneymaker for me, providing these dream homes for my buyers makes me feel part of something wonderful…for these families, the neighborhood and the city as well.  I love it.”

(If you’d like to check out more of my book or purchase a copy, you may go to www.authorhouse.com and click or their book store, or you may contact me personally at barb@thelondlordchronicles.net.)   Re: land contracts, with HERA and the Safe Act (see “Is the Party Over?”) my ability to do these without a mortgage loan officer’s license may be restricted.  The jury is still out . . . everything depends on the interpretation of the law.  I’ll keep you posted . . .

Finding that perfect tenant

Okay, so you’ve got your rental fixed up . . . repaired, cleaned, painted, etc.  When I first began this career, I advertised in the free local newpaper that comes out once a week, and I still do.  This is a great way to find tenants for your low and middle income rental properties.  With our changing economy, many people no longer subscribe to the city newspaper.  It’s too costly to buy.  And furthermore, after checking with my newspaper, I found it was too costly to advertise there, too. 

People are either picking up a copy of the free paper, or they’re looking for a rental through Craig’s List.  I also post my available properties there.

But before posting my ads in these two places, I leave a flyer in the mail boxes of my favorite tenants, letting them know the particulars of my empty unit(s).  I’ve found that networking with my excellent, responsible tenants is a great way to find more excellent tenants.

Another option for finding potential tenants is to visit some of the businesses that are close to your rentals.  What a nice perk it would be for those employeees to have the option of walking to work!  If you can, talk to the manager/supervisor of the facility and instill confidence in the type of landlord you are.  If you can establish a good relationship, maybe they will send people your way.  You could drop off flyers every time you have an empty unit.

Along that same line, post a flyer at the local grocery store, church or community center if you can. 

When you meet at the unit, sell it to the applicant if he/she is a great candidate!  Mention the good attributes of the house, neighborhood, and impress them with your own qualities as a landlord.  There are lots of slumlords out there, and you are not one of them!

Find out as much as you can about the applicant’s current situation, and have them fill out your application.  (I don’t charge a fee; this puts people off.)  Move quickly . . . there are other houses out there for rent, and if you’ve found a good candidate, then you need to close the deal if possible.  Good luck!

Finding the Right Balance Between Friend and Foe

Early on in my investing career, someone gave me an excellent piece of advice.  He was helping me rehab a 100-year old duplex that was sturdy but pretty rough inside.  This was the second duplex Joel had helped me turn into comfortable living quarters.  One day as we worked he asked me if my tenants knew that I’m the owner of these properties.  I told him yes.  He eyed my 105-lb. frame and said,

“You know, if I were you, I’d keep that to myself.  You’re a 5-ft. tall female, and you never know what desperate people can do when they’re backed into a corner.  When they’re behind in their rent and you’re evicting them…..wouldn’t it be better if they thought you were just the property manager?”

I blew him off at first, but acquiesced after thinking about it later.  Regardless of sex, it behooves you to play the role of  “middle-man” with your tenants.  You’re the go-between for them and the owner.  Many tenants automatically view the owner as the “wealthy land baron” who is out to rape them financially.  And yes, there ARE some slumlords out there who give the rest of us a bad name!  So, it’s best to keep your ownership a secret.  And if you have your properties in an LLC or other type of corporation, there’s no way your tenants can find out otherwise.

If you treat them with fairness and respect, your tenants will see you as someone who has their best interest at heart….someone who will go to bat for them with the “wealthy land baron” owner.  For example:

  • Paul, a lazy tenant whose girl friend worked two jobs after he got laid off, was seriously behind in his rent.  He didn’t have time to look  for work, because he was too busy drinking beer, playing video games and surfing porn sites on the computer. When I asked him about getting some work to help with the rent, he said, “I can’t work.  I have attention definite disorder.”  (What?)  He asked for more time and I told him I’d talk to “the owner” about it.  The owner said no, but at least I asked on his behalf.  He wasn’t furious with me.
  • Anika called at 9:30 one night to ask if she could paint her bathroom black.  I told her I’d call the owner and get back with her.  The owner said absolutely not, of course, but I told her to go ahead and buy black curtains, black rugs, a black shower curtain and black towels to create the ambiance she was looking for.
  • Tammy wanted to get a cat.  She’d been an excellent tenant for two years, and she’d had problems with mice.  I told her I’d talk to the owner and let her know.  Now, I don’t normally allow pets, but Tammy was a very clean person.  Her car and her house were spotless.  So in her case, I bent the rules.  I allowed the cat, after declawing, and haven’t regretted the decision.

In certain situations like the one above, telling your tenant you’ll talk to the owner gives you valuable time to reflect on their request.  Sometimes your snap decision isn’t always your best one, and telling them you’ll get back to them gives you the opportunity to consider various options.  Many times, I’ve come up with much better solutions during that time when I was talking things over with the owner!

In fifteen years, I’ve only felt physically threatened once as the property manager, and I think the person was mentally unbalanced and probably threatened lots of people in a variety of situations.  I wasn’t special.

I’ve never regretted the decision to keep my ownership private.  The camaraderie  between my tenants and me contributes to a good working relationship.  I’m careful not to let it drift into a friendship thing….there’s a fine line you mustn’t cross.  I care about my tenants and enjoy being their ally when I can.  And when they do bad stuff and the **** hits the fan and they need to leave, it’s the damn owner’s fault!

Your Sewage Soup is Served!

 

A Few Days of Dinner

Bon Appetit.

So, I’d been out of town on vacation.  (Yes, landlords can and do get away.)  There was no need to let my tenants know I was gone, because I can always be reached on my cell.

In the “old days” when I had a pager as well as a cell phone, I didn’t give out my cell number to my tenants.  I was afraid they’d abuse the privilege and call me when they broke a fingernail.  I’d have them page me when needed, and I’d call them back.

If I went out of town (and out of reach of my pager) I was forced to let them know I was leaving.  In that case, I’d have them page my maintenance guy, for emergencies only.  But it always seemed like “stuff” went down when I was gone.  “While the cat’s away, the mice will play.”  Or the mice will not send in their rent.  And will leave without notice.  And let me clean up the junk they didn’t feel like taking with them.  Or will get in fights with their neighbors, resulting in a call to the police.  Etc. etc.

When I pitched the pager and went solo on the cell, I realized my worries about tenants bugging me constantly were unfounded.  Yeah, there are a few people who call about minor details and are long-winded, but I always have the option of letting the call go to voicemail, and my phone cuts them off when it’s had enough.  Anyway, I digress…

Before I recount these events, let me first say these types of incidents are few and far between.

I got home from a great trip, and went to check on a place where I had a girl moving out.  I knocked and after no answer, I let myself in.  The smell hit me.  I traced it easily to the bathroom shower floor.  In my absence, the sewer main had backed up into the shower with enough force that it blew the center drain cap right off!  There was blackish brown “matter” all over the shower floor, about 1 1/2″ thick.  It consisted of partially decomposed toilet paper, poop, and enough urine to make it slightly soupy.  “Poop du jour.”

It was time to call in the cleaning crew.  (That would be me.)  My equipment consisted of a plastic bag, a wide-blade putty knife, my trusty spray bottle of Krud Kutter and rubber gloves.  I tried hard to breathe through my mouth.  The shower floor cleaned up well, after some scraping and scrubbing. 

When I finished that project, I ventured over to another rental to check on my tenant who had moved out a couple days earlier.  He’d told the people on the other side of the house that his apt. smelled bad.  (Uh-oh.)

When I let myself in, I thought, “OHMYGOD, did somebody die in here?”  This was almost worse than the other place.  I tracked it down to the bath tub, which had about a foot of water in it.  There was a plunger standing in the middle of the pool.  Evidently, my tenant decided to move instead of calling to tell me he had a plumbing problem!  Go figure.

It’s rare that I come across people who are afraid to call me with problems.  I don’t understand why this happens, other than I think they may feel they’ll be blamed or charged for it.

Sewage

This is NOT a Toilet.

After I called and got the issue taken care of, I found out this wasn’t a sewer problem.  This guy had been letting food go down his kitchen sink drain.  There was no garbage disposal.  The drain had actually backed up into his tub!  It was filled with water, mixed with a healthy dose of grease, rancid meat particles, slimy greens, and I think I saw a little corn in there too.  Another putty knife job.  But the tub wouldn’t even scrub clean.  It was well beyond saving and I had to have it resurfaced.  The cost was $300, which is much cheaper than replacing the tub.

Glad I have a strong stomach, and I think my gag reflex is non-existent.