Bad Tenants

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All I can say that as bad as the crash was here, I am sure glad I don't live in Florida. If global climate change theorists are right, Florida is due for death by hurricane any season now. The Feds will eventually have to insure Floridians because no insurer will want to take the risk if there are lots of Katrina and Andrew size storms in your future. I also can't see Fla. government surviving without changing the tax structure drastically. IIRC, Florida ranked high on unfunded pension liabilities for state and local gov't employees. Not that I am knocking your state, mind you, it just bore the brunt of the recent meltdown because it used to be a place everyone wanted to live. (-: In a spec bubble, the mightiest fall along with the weakest. Times they are a changin'.
-- Bobby G.
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The largest wind insurance company (at least according to yesterday's Miami Herald) is already the state-owned company. Most others have trimmed back as fast as the state will let them.
--
"Even I realized that money was to politicians what the ecalyptus tree is to
koala bears: food, water, shelter and something to crap on."
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On 2/2/2011 9:28 AM, willshak wrote:

Ask the percentage, before they start filling out the forms. Sometimes, market-dictated rent minus their cut, doesn't leave enough to pay the mortgage and insurance. All depends on how nice the house is, and how short the local rental property supply is for people who don't want to (or can't) buy their own place.
I've known a couple people that did it anyway, out of desperation, and ended up selling the house cheaply a year later, because the place was still costing them money. IMHO, if you can't rent it out for at least, oh, 130% of your fixed expenses, you are better off selling and getting the loss over with (assuming you are not so upside down it would wipe you out, of course.)
--
aem sends...

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<stuff snipped>

Yep, it's certainly an interesting business proposition, full of so many "what if's" that in the end, you just got to go with your gut. We're pretty much at the point of deciding not to rent out the place and just to carry it while we "live around" to see where we'll eventually land. I used to have my heart set on California, but they're falling off a financial cliff into an earthquake and a slo-mo replay of the Spanish-American war. Real estate there seems to have actually bottomed out, at least according to the LA Times, which is bottoming out itself.
-- Bobby G.
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That's precisely why I might just have a management company handle the first year's rental. Thanks!
-- Bobby G.
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On 2/1/2011 8:14 AM, Robert Green wrote:

You can hire a property management company to handle the rental for you, including dealing with evictions. They will tell you what processes they use to screen renters and show you sample rental agreements. If you'd rather not go that route, you should find some of the online forums for people who invest in and rent out rent properties, such as the SDCIA http://sdcia.websitetoolbox.com You can join these forums and get advice from experienced landlords.
You will, of course, have to make background checks prospective renters, including credit, criminal histories, rental histories, references. Verify their current employment and income, and confirm their prior rental histories - call the landlord, don't just take the applicant's word for it. It's common for crooked types to give you a fake landlord, usually a friend of theirs - so check the property and confirm with the owner of record that the applicant really had rented from them. If you can, inspect their current home. If it's a dump, you know they'll treat your home the same way.
Do a face-to-face interview and look for anything that raises flags, such as dilated or red eyes, track marks, lying about small things, changing their story, repeated protestations of honesty, failing to answer certain questions. Use your gut instincts. You won't catch them all, but you'll spot some of them.
Put a clause in the agreement outlining who, and only who, is allowed to reside in the home. You don't want a situation where you discover too late that the couple who signed the lease turned it over to their spoiled kid and all his frat buddies, nor do you want lowlifes renting out every square yard in the house to their friends.
If you do have to evict, a strategy suggested by several landlords is to bribe the tenant to leave asap. You and they know they can drag things out, and you don't want them to do any (additional) damage in the meantime. So you phrase it as a service to them: you gotta evict them, but you know it won't be easy for them to find a new place right away. You are willing to "help out" by paying them a relocation fee (usually two-three hundred bucks) to get their stuff out within 24 hours. You will meet them and pay them cash as they vacate. Lowlifes find it hard to resist cash. Don't get worked up about having to pay them to leave when the law's on your side; you have to view the bribe as a cost of business. You're protecting your property from (further) damage.
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It turns out I don't want to rent to anyone who was like me when I first started out! (-:

Sounds like a good idea. Glad I've been watching "Lie to Me" to get a handle on micro facial expressions.

This a college town. They pack 'em in like clown cars despite the local zoning laws limiting the number of occupants. That's why inspection (or a webcam mounted in a neighbor's window pointing to the house) is a very, very good idea.

I came across this "technique" when listening to Carleton Sheets CDs I had borrowed. Apparently three Ben Franklins translates into an irresistible lure for skeevy dirtballs. Good to know. My neighbor only rents to fellow churchmembers. Now I know why.
-- Bobby G.
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wrote:

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I agree. Nothing dictates it be anything but cordial and mutually beneficial. I assume you live someplace where chivalry means something to be able to operate without paper. I assure you, that's not here!

We've been thinking about that and the only thing that scares me is that I was a housesitter once upon a time and I wasn't particularly a responsible young man although I could fake it enough to get the gig. I am afraid I would be turning my house over to a younger version of me. (-:

Yes - we're near enough to DC to make it attractive to tourists but that kind of rental is usually best done by someone who's living near the area to coordinate things. We wouldn't be.
Thanks for your input - it's something to consider if we ever decide to become professional landlords.
-- Bobby G.
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Had the same concerns with my daughters (grin).

--
"Even I realized that money was to politicians what the ecalyptus tree is to
koala bears: food, water, shelter and something to crap on."
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On 2/2/2011 6:51 PM, Robert Green wrote:

A friend inherited a bunch of rental properties in a tourist area. She had to hire a management company because she doesn't live in that area. So when a lighbulb burns out the renter calls the management company who dispatches an electrician to change the bulb and she gets a bill for $185.00.

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wrote

do.
You've noticed. (-: The tax system in America is part of the problem. We pay people not to grow food, we pay oil companies incentives to do what they would be doing anyway, the personal income tax forms get more complex each year . . . you get the picture. And now we have a health bill that essentially feeds more victims into the badly broken health insurance system under threat of fines. It makes me wonder just "Who runs Bartertown?"
-- Bobby G.
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Robert Green wrote:

Naw, field mice won't hurt anything. Used to have them every year at the first cold spell - they were just trying to get warm. Believe me, they'd rather live in the field anyway - especially after we got a cat.
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How about a "rental with option to buy"?
A young couple may want to buy a home, but first they want to see if they can make a living. So rent the home to them, and give the couple the option to buy it out from you at some future point.
That type of couple is liable to be more motivated in preserving the property for future purchase than a renter who plans to just pack and leave in a year or two.
-- Steven L.
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On Tue, 1 Feb 2011 09:14:55 -0500, "Robert Green"

I can only speak for the laws here in AZ but if you are worried about being able to get rid of them just rent on month to month leases. If you start to see problems, either in them paying the rent on time, or in keeping up the place, just give them their "30-day" notice. If they stay past that you'll have to take them to court for eviction, not much you can do about that part, no matter what you do you can't physically throw people out, only the court can authorize it and then you have to have the sheriff or constable do it.
Note - 30 day notices can take as long as 60 days, you have to give them the notice BEFORE the start of the "next rental period". So if you wait till the 2nd of Jan you have to give them notice to be out by the end of Feb., not Jan, which will be almost 60 days.
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On Fri, 11 Feb 2011 04:51:05 -0800, Smitty Two

That's risky. If they had stuff stolen he could wind up on the hook. Most tenants have no idea of their rights. But every once in a while you run into one who knows every part of the law AND is malicious in applying it. We had a guy like that in our town for a while making life miserable for the apt complex he was living in. He'd go around looking for problems and if he couldn't find any he'd create some.
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Did he soon have a problem finding a place to live? Any landlord who doesn't do background checks is lawyer bait.
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