Posted by Peter Wells on June 04, 1999 at 17:11:34:
That’s true…at least the check is there like clock work and you don’t have to chase tenants for non payment.
Bronchick or anyone…Re:Bad tenants - Posted by Peter Wells
Posted by Peter Wells on June 03, 1999 at 17:13:29:
How should one best handle the situation where the tenants
leave the property and when you call the electric company
and water company to turn on the utilities on, they tell you
that it can not be turned on because the tenants ran up
large bills and did not pay. Even though the utitilies were in the tenants name, the utilities people are coming after me. Thanks in advance.
Re: Bronchick or anyone…Re:Bad tenants - Posted by Carmen
Posted by Carmen on June 07, 1999 at 19:51:06:
I was a landlord for a month. It is my first property, and I made so many mistakes I can’t believe I’m still making money on it! The tenant (Section 8, 22-year old mother with 6 - yes, six - kids) moved out 1 month after we purchased the property (we should have only closed after she moved!) We encouraged her not to renew the lease, and luckily if she did anything terrible to the home we could report to Section 8 and she’d lose her privileges, so there was no breakage. However, she left the house absolutely trashed - took 3 people one full day to remove the trash, furniture, clothes, etc. and get the house ready to begin the rehab - don’t know how long to get the stench out (luckily, minor damage except to carpets, just LOTS AND LOTS OF TRASH, including old rotting food in several areas). Another mistake - the previous owner claimed he had spent the “deposit” the tenant had given him 3 years ago to pay for her electric and other bills, so we had nothing to cover the costs of the cleanup.
I think I’ve had enough of landlording. Unless I can do it in homes in my neighborhood.
I guess you have to have the “guts” for low-income rentals. It’s not the lack of income - it’s the lack of education, lack of self-esteem, lack of responsibility, lack of desire to succeed or move ahead, and the idea that the world “owes” them something that bothers me. I am a closet social worker, but I am getting it out of my system fast - the more help I offer, the more I seem to get “taken” and I really do still get disappointed every time… Even the $300/month positive cash flow doesn’t help me want to continue.
Now I’ve got to try to sell this house to the type of person who would live in this neighborhood, but that still has some credit and desire to own - a tough sale. I don’t want to L/O - I’ll just have the same problem in a few months/year.
Sorry for the ramble… just venting.
THE ART OF LANDLORDING - Posted by Karl Grube
Posted by Karl Grube on June 03, 1999 at 18:52:26:
TRY to turn a negative into a positive. Immediately pay up all utility bills … you can’t rent without power! List all utility bills and penalities for your accountant; inventory your property for additional damage - get replacement estimates for insurance and income tax deductions. Review the situation with your CPA/accountant for tax savings. FILE in small claims court to retrieve some of your expenses; get a court judgement on total lost income; find a company to collect the judgement…don’t do it yourself!
In the future, screen tenants more thoroughly; get a co-signer on the rent/utilities; have the utilities put into a credit card account; collect rents on a weekly basis instead of monthly; talk with utility companies as to future action against tenants; enroll in Landlording 101 and 102 for your continuing education; and buy lunch for as many successful landlords as possible!
Re: Bronchick or anyone…Re:Bad tenants - Posted by Bert G
Posted by Bert G on June 03, 1999 at 17:29:53:
Will they turn you on if you pay the overdue bill? You might just get stuck doing that. Where I live, the City runs the water dept, and its right in City Ordinance that if the tenant doesn’t pay, the landlord is responsible. I’ve taken to raising the rents and paying the utilities myself just to avoid the hassle after having been stuck a few times.
Your mileage may vary. Of course, you can TRY to get redress from the departed tenant, but don’t hold your breath.
Bert G
Re: THE ART OF LANDLORDING - Posted by Peter Wells
Posted by Peter Wells on June 03, 1999 at 19:31:19:
Thanks so much for your good advice!
Now I have to hunt these people down, but
I have their SSN.
I see landlording can be a big headache to say the least. I know someone that threw in the towel for
landlording…the tenants totally trashed his properties
and would not pay him…in court the tenants lied and
turned it around so that he was the BAD guy in court…
just like Pacific Heights…Now he buys and sell and l/o
and finances R.E. …Maybe I should buy/sell, l/o and fiance R.E. …He was dealing with some low income properties…so am I…that means dealing with
“low income people”…from my experience that generally means trouble…but the R.E. gurus advise
buying low income properties for + cash flow…the higher income properties the people are better to deal
with, but the cash flow is less…What is your advice?
Re: Bronchick or anyone…Re:Bad tenants - Posted by Peter Wells
Posted by Peter Wells on June 03, 1999 at 17:58:14:
Yes Bert, they will turn be on if I pay the tenants
bill. $300 seems like a lot of money to pay for some B.S. tenants. Now I see why a lot of people are getting out of the R.E. landlording business. Too many torn up
properties and missed rent payments…Thanks.
Re: THE ART OF LANDLORDING - further followup - Posted by Karl Grube
Posted by Karl Grube on June 04, 1999 at 08:57:33:
If you have their Social Security #'s, you have a potential lein on their credit for seven years. We all chase money in our society … good and bad accounts - I guess it is part of life!
YOU might qualify the property for the HUD Guaranteed Rent Subsity Program. HUD sends you a monthly check; HUD insures the property; HUD pays the utilities; HUD guarantees a bank loan for rental property; HUD provides flood insurance; and HUD even raises the rent a full 7% on January 1st of each new year!
There is always this… - Posted by Jim IL
Posted by Jim IL on June 03, 1999 at 19:51:47:
Peter,
If you are really tired of landlording, and dealing with headaches such as this, sell the home.
But, do so in such a way that you maintain some control, and gain as much cash flow and profit as possible.
Perhaps a Lease Option could be in order.
You can go ahead and pay the ultility companies off, and go after the ex-tenant, and try to recoup that money from them.
And, while L/O’ing the home, you can get more money upfront, which is non-refundable, thus covering any bills left behind.
You will also get a better tenant/buyer because they think they are gonna buy the home, so they have “pride in ownership”.
Also, your rent payments each month can be higher, because it is a L/O.
Also, you can price the home for more than FMV because they are getting a break on being able to live in it as they buy.
Example:
Home FMV: $100k
Option money upfront from buyer: 3-5% ($3k-$5k, which is more than your traditional “security deposit”)
Sale price at the end of the option: $115k
Monthly rent: Market rent rate, plus a few extra bucks.
So, you get monthly cash flow, nice cash upfront and great profit backend.
The real beauty behind this is the fact that MOST Tenant/Buyers will not excercise the option, and then you are free to do it all over again for more money.
Also, any money you make now is tax deffered if you like, because you do not HAVE to pay taxes on it until the entire transaction closes.
And, while they make the payments, you can still have all the tax benefits of owning it still. Deductions are a nice added cash flow.
Just my thoughts,
Jim IL
P.S. Can you tell I’m having a ball doing L/O’s?
L/O’s still keep you responsible for tenants - Posted by PBoone
Posted by PBoone on June 04, 1999 at 01:14:41:
Tenants can still run up bills and you would be left to pay right?
Pat
Re: There is always this… - Posted by Peter Wells
Posted by Peter Wells on June 03, 1999 at 21:35:54:
Thanks Jim so much for your thooughtful insight
on this matter! These properties are not bad (at least my properties are not) but the neighborhood
is a neighborhood were mainly Section 8 type people
want to live. There not many decent renters, l/o people that want to move there nor very few people
that want to buy there. It is hard to sell…looks like
I am stuck for while…I think I will try a little higher middle class neighborhood. I guess I will have to do the l/o thing because the properties there are more expensive and +cash flow almost non-exists there
with normal renting…Thanks for your help!
Re: L/O’s still keep you responsible for tenants - Posted by SandyFL
Posted by SandyFL on June 04, 1999 at 08:12:47:
In theory … yes… but I would think the possibility of this is less likely in higher dollar properties where the tenant buyers have put down some serious cash up front for option consideration.
I was just thinking, its too bad that utility companies can’t do like escrow companies do … and cc the bill to more than one party. Then the landlord could keep an eye on things and know when trouble is brewing, when the tenants stop paying for lights.
Sandy FL
Gawd, I hate section 8!!! (nt) - Posted by Joseph Turner
Posted by Joseph Turner on June 04, 1999 at 11:27:22:
sasdfsdf
Re: … and cc the bill to more than one party - Posted by Tim (SNJ)
Posted by Tim (SNJ) on June 04, 1999 at 14:10:36:
Sandy - In South Jersey the utility companies have a program that will call a second party if the bill goes unpaid for more than 30 days.
They will also switch the bill over to my name if the tennant has the service disconnected (as in moves with out letting me know) so I don’t end up with frozen pipes. They call me to let me know when they are doing this.
Last week I found out from the gas co. that they will back bill a tennant if the tennant doesn’t switch the service over to their name when the lease calls for them to. IE: I had a tennat move in on March 15 and he was to switch the service to his name. He final did last week after I had the gas turned off. (NOTE: the gas company was the one who suggested this {and I was surprised they said it was legal} and the tennant was fully aware that the gas was going to be shut off on such and such a date if they didn’t call the gas company) He had paid me for the April bill (which I paid) and promised to call right away (which he didn’t). After the tennant had the gas turned back on, I faxed the lease to the gas company and they are billing the tennant back to March 15th. Why do I keep this tennant? He is a “Friend” of mine - with friends like this, … Ah well, he does pay his rent on time.
Tim
Re: Gawd, I hate section 8!!! - Posted by Bert G
Posted by Bert G on June 04, 1999 at 15:10:36:
Really? How come? I love 'em. Properly screened, they’re decent tenants, and the rent is always on time.
BG