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Landlords in Here Please

Runum

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I currently have 2 vacancies. Most of the potential renters I am interviewing now have either a foreclosure or eviction. In the past that has been a no no. Now we're going to be seeing more of them. How do you plan to deal with these applicants in the future, still a no no or case by case? Suggestions, comments?:cheers:
 
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SteveO

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We will take people that were foreclosed on. Evictions are different. We might take them depending on a couple of factors. Ability to put a larger deposit down. Recent rental history.
 

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Have you used Craigslist? Considered lowering your rates?

Market is slow right now.

Greg, just my POV (and mine only), but someone who walks away from a mortgage is similar to a guy or gal that cheats on their spouse:

If they do it once, it's quite likely they'll do it again.

(DISCLAIMER: I am NOT saying that those who cheat are the same as those who walk away from their loans-- all I am saying is if you break any kind of agreement ONCE, it's much, much easier to do it again.)

Apologies to any married faithful people (and to those who pay their mortgage every month) for making this cross comparison! ;)

-Russ H.

PS SteveO-- you out there?
 

Russ H

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Ah-- SteveO *is* out there-- you posted while I was asking if you were around! :)
 
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AroundTheWorld

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I think there will be a relaxing of standards going on in this economy... you have to pick and choose which standards to hold firm on and which to relax.

Reliable Income? Very Important.
Plans on Quitting soon? (seems to be happening a lot lately. New tenant decided to up and quit) Red flag. Of course, they aren't going to come out and tell you this.

Reliable income to me, is more important than a foreclosure. What was the payment on the house they lost vs. the rent? If rent is significantly lower, and they have stable income... well... that is better.
 

Runum

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Thanks all. Yeah, that is something. For those that don't know, my last two tenants I've had trouble with...both had impeccable references, great income, good credit, no criminal history, paid deposits, model prospective tenants. BOTH of them quit their jobs right after moving in. They wanted to be in business for themselves. One turned my house into a welding shop. Of course I was labeled as unreasonable when their new businesses couldn't pay the rent.:tiphat:
 

AroundTheWorld

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Runum....

This hasn't only happened to you. It has happened up here to us too. What are people thinking?

In the end, each landlord has to figure out how to minimize losses.

Vacancies are obviously extremely costly.
So are evictions.
So are the tenants that trash the place.

How do you find the balance between these things as you screen tenants?
Bottom line is that your tenants need to:

be able to afford the rent.
not trash the property.

What ever your priorities are... the screening should be weighted toward those things.
 
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SteveO

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The tough part is finding someone that is stable and does not want a life filled with conflict. I am sure that you want to find a resident that is stable.

Are you currently offering any concessions? One way to tell if someone really plans to stay and pay rent is to offer a buydown of the special. You can offer a free month but allow for someone to put more down in exchange for lower rent. This might show some of the motivations and future plans. We get plenty of people that want the free month and then don't ever pay.
 

Russ H

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Runum said:
my last two tenants I've had trouble with...both had impeccable references, great income, good credit, no criminal history, paid deposits, model prospective tenants. BOTH of them quit their jobs right after moving in. They wanted to be in business for themselves. One turned my house into a welding shop. Of course I was labeled as unreasonable when their new businesses couldn't pay the rent.

AroundTheWorld said:
This hasn't only happened to you. It has happened up here to us too. What are people thinking?

Guys, I think what we are seeing is the Great Entrepreneurial Job Rush of 2009.

THAT is what is hip right now-- starting your own business.

THAT is why people are quitting their jobs.

It's everywhere you look-- on TV, online, in newspapers/magazines-- the OWN YOUR OWN BUSINESS craze is is full swing.

(MJ, you owner of an entrepreneurial website you, are you listening?) ;)

Makes complete sense if you think about it.

People are worried about losing their jobs.

They REALIZE that when the economy tanks (or even when it doesn't), there is no job security.

So they reason that (with a few hundred or thousand $$ in the bank), they can start their own business and cut themselves free of the chains of being an employee forever!!!

We see it here all the time-- someone comes here, tells us they're gonna quit their job, and start their own biz.

(of course, we tell them to work at their day job and start the new biz at night, so they can stay alive).

-Russ H.
 

Bilgefisher

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Wish I could help Greg, but I took the easy way out and went sec 8 to get new tenants. Least way I get my check each month.
 
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Runum

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Thanks Bilge. I had a section 8 director want to take a look at one of my houses last week. She said that the house would qualify and the rent was OK. The problem was the soonest she could get the rent OK'd was Sept. 1 and she wanted me to hold the house for the prospective tenants until then. I wouldn't hold it but I would rent to them if it were still vacant.

She also said that the State of Texas was not accepting any more people for section 8 housing. She had a waiting list of people wanting to get on her role.
 

dollarBlogger

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I currently have 2 vacancies. Most of the potential renters I am interviewing now have either a foreclosure or eviction. In the past that has been a no no. Now we're going to be seeing more of them. How do you plan to deal with these applicants in the future, still a no no or case by case? Suggestions, comments?

If I was a little desperate and had someone with either a foreclosure or eviction come along I would probably pay extra special attention to their references and past landlord(s).

I recently came across a prospective tenant who had an eviction back in 2005. I was pretty much ready to deny them until I spoke to some of their references and landlord. I spoke in person to their current landlord and they hadn't had one late in the past 3 years. Although I didn't end up putting them in my unit I was surprised that they had turned things around. Course who knows what would have happened if I put them in my unit? As you've experienced, you just never really know about someone until they move in.

Maybe you've already been doing this, but have you tried putting out signs around the neighborhood to gain more exposure? I currently have about 10 signs out and about and I get about 10 calls and 1 message a day (to my recording service) about the place.
 

MonTexan

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Greg,
As far as I know each city or county runs their own Section 8 program so it's not necessarily true that the State of Texas isn't accepting new applicants. Like Bilge said, screening is a bit easier when the majority of your rent is guaranteed to show up. Credit checks are worthless because they've all got bad credit. It basically comes down to criminal background check and your gut feel about the person. The latter requires experience and you know what they say about experience....it's something you get right after you needed it! Good luck.
 
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Runum

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Maybe you've already been doing this, but have you tried putting out signs around the neighborhood to gain more exposure? I currently have about 10 signs out and about and I get about 10 calls and 1 message a day (to my recording service) about the place.

Thanks DB. I'm certainly not desperate, just relating the type of applicants I'm seeing lately. All of my properties are on busy corners. I have signs out and I have info boxes on the signs with fliers in them. I also have the properties listed on Craigslist and my own site. I do a LOT of prescreening with the fliers and the internet so I don't waste a lot of time with lookie loos. I also have the floor plan taped to the window so they can see the room sizes and should have that online as well but I don't, yet. Thanks for your suggestions though. Just seeing a lot of applicants that I'm not used to seeing and I guess I'm gonna have to deal with.
 

Russ H

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Does Craigslist allow photos?

Or links to photos?

-Russ H.
 

Runum

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Does Craigslist allow photos?

Or links to photos?

-Russ H.

Craigslist allows 4 photos. I link my Craigslist ads to my events site and put as many photos as I want to. :icon_super:
 
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kidgas

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I think case-by-case basis is appropriate. I certainly think a foreclosure might be more reliable than a previous eviction since there are several circumstances which might lead to that scenario. One of my best tenants was a young couple who declared bankruptcy. He had tried to start his own business. My wife and I sat down, met the couple and interviewed them, got their story and allowed them to rent from us. It was a great decision. They were never late, upgraded the house on their own, and were simply pleasant people. I was sad to see them move.
 

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Greg,
As far as I know each city or county runs their own Section 8 program so it's not necessarily true that the State of Texas isn't accepting new applicants. Like Bilge said, screening is a bit easier when the majority of your rent is guaranteed to show up. Credit checks are worthless because they've all got bad credit. It basically comes down to criminal background check and your gut feel about the person. The latter requires experience and you know what they say about experience....it's something you get right after you needed it! Good luck.

I know that here in AZ section 8 is by municipality. Phoenix is also not accepting new section 8 applicants, and I would guess that that is true in most places since state and local governments are feeling the pinch of reduced income due to the down economy. But that doesn't stop you from soliciting tenants already approved for section 8.
 

KyJoe

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I would steer clear of the evicted applicants. Once they go through the system, a second go at it is no big deal to them. Unfortunately, if things got really bad (like in Detroit , have you seen what real estate is selling for now?) you will be grabbing at straws. Get a bigger deposit, if they don't have any money, get listed as a lien holder on their car (kinda kidding on that one, maybe ?). I try to get cosigners on some that I rent to, like students.
 
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Bilgefisher

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Even if they are not accepting new applicants, it does open a whole new list of current renters to your homes. In fact you can use that to your advantage with folks renting as Sec 8. They must fly right or they can get kicked off the program. In Colorado, once your booted, your not allowed back in the program. Many renters cannot afford to let that happen.
 

Russ H

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Bilge-

We had to evict all of the tenants to do the work on the building (parts had no heat, elec was a fire hazard, water ran orange, sewer pipes all busted, etc etc etc).

Of all the people we worked with, the section 8 guy was one of the nicest, and most polite.

There was another tenant who was a real piece of work . . .

. . . refused to answer his door, or open any of his mail, or answer his phone . . .

Pretty hard to give an eviction notice to a guy like that!

(so he was still there after everyone left).

Kind of a messed up, paranoid dude.

But that took care of itself. Soon as everyone else was out, I got messages from him on my landlord answering machine-- him ranting about how there were strange people walking around the building at all hours and he was scared for his life.

(the people were contractors, 8 am-4 pm)

But he still insisted he heard voices and footsteps all around him in the middle of the night.

Geesh.

-Russ H.
 

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But he still insisted he heard voices and footsteps all around him in the middle of the night.

Geesh.

Admit it Russ. You were dragging heavy chains and making ghost sounds just to scare the guy away, weren't you? :pissed::eek::smxD:
 
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Russ H

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LOL, no, the meanest thing I did was have the phone answering machine for the landlord in the building (I called in every week and picked up the messages)-- so when he called me at 3 am, he could hear the phone ringing from one of the empty apts!

Never did it to be mean (just efficient). 'Cause I never figured I'd have some wackadoo calling me in the middle of the night to complain about hearing voices! :eek:

His paranoia worked in my favor-- guy got so scared of being the only one in the building he got out of there pretty quick once he was spooked.

I think he was holding out for a payoff/buyout. F that. We would have shut the water off during the day (when he was working, and out) to do the demo, and turned it back on at night.

Never got that far-- he scared himself out of there in a matter of days, well before the contractors ever started working!

-Russ H.
 

AroundTheWorld

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Runum,

I mentioned this to you in mastermind... but forgot about this thread. Will mention it here too for benefit of other readers:

Here is another strategy for the declining quality of applications.

If they fail a certain criteria, you could ask them for a third party guarantee - (co-signer). If that person looks good, you can have them sign and notarize a form stating that they are responsible for rent and damages should the tenant fail to do so.
 
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Russ H

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Sparlin-

To be clear, we never would have turned off the water while the guy was in his apt.

He worked during the day-- and we would have turned off the water while he was gone (and had it back on before he returned). :)

We would also have made plenty of noise during his work hours (when he was away)-- but again, it never came to that-- he up and moved out. Buh-bye . . . :wave:

-Russ
 

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I've heard stories of long lasting court-battles between landlords and tenants. Come time for eviction, tenant pulls out the wild card and complains rent was withheld for __________ (you fill in the blank: water pressure issues, no heat, broken window,etc)

so, a landlord I knew was in this predictament made it absolutely miserable for a tenant. He drilled holes in the roof bove the bed so the rain poured right on their mattress. And he also changed locks on the tenants while they were at work. He did other things I can't remember, but they were comical
 

taichijedi

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Bilge-

There was another tenant who was a real piece of work . . .

. . . refused to answer his door, or open any of his mail, or answer his phone . . .

Pretty hard to give an eviction notice to a guy like that!

A firend of mine had an issue with a guy like this. He does alot of Section 8 work, (I know that your section 8 guy was was polite, but some are not,) and one strategy he developed was to have prospective tenants sign an eviction notice upfront when they are initially filling out the forms for renting. Of course it is always his intention never to use it (UNLESS ABSOLUTELY NECESSARY), and those who are honest people generally don't mind signing it because they aren't going to do anything to warrant its use anyway. People who like to cause problems generally don't want to sign it, so they eliminate themselves from the process, and it keeps the landlord from getting jammed up by troubling tenants later on down the line if s/he needs to issue the notice.

I've heard stories of long lasting court-battles between landlords and tenants. Come time for eviction, tenant pulls out the wild card and complains rent was withheld for __________ (you fill in the blank: water pressure issues, no heat, broken window,etc)

Again in Section 8, if a tenant damages your properties, you can report it to your director with documentation (photos, forms, etc.) If a Section 8 tenant has a documented case of trashing a unit, they can be removed from the Section 8 role at the landlord's request, and they will be blackballed from the program permanently. It does provide a degree of leverage to the landlord, particularly if you let the prospective tenant know (in the nicest way possible, you don't want to scare them off) that you are aware of this statute. It generally keeps them from wantonly damaging your units (general wear and tear aside).

:cheers:
 
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Russ H

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taichijedi said:
A firend of mine . . . has prospective tenants sign an eviction notice upfront when they are initially filling out the forms for renting. Of course it is always his intention never to use it (UNLESS ABSOLUTELY NECESSARY), and those who are honest people generally don't mind signing it because they aren't going to do anything to warrant its use anyway. People who like to cause problems generally don't want to sign it, so they eliminate themselves from the process, and it keeps the landlord from getting jammed up by troubling tenants later on down the line if s/he needs to issue the notice.

This is stone cold brilliant.

Reminds of the landlord that gives his tenants a 15% discount for paying by the 1st of the month. He writes the lease for 15% more, then tells them, "Well, you told me you always paid on time, so I just assumed you automatically qualified for the discount. You do pay on time, don't you?"

Then, if his tenants ever get him the rent after the 1st of the month, they owe him 15% more.

-Russ H.
 

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You could consider allowing a previous foreclosure tenant. Have them offer up at least first 2 month's rent. That way you are always a month ahead. Then after a year goes by (or whatever length of time you want) and once you know they are reliable, offer them a month that they don't have to pay and no penalty.
 

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