Handling Long-term Visitors

Your tenant tells you that a boyfriend/girlfriend or spouse is moving in with them. Worse yet, they don’t tell you and you find out another way.

Maybe it’s not a significant other, but a sibling, cousin or even a parent. What should you do?

1. Review Your Lease
You must act right away or the new person could end up with the rights of tenancy.

First, read your lease to see what was specified about overnight guests.

For those who haven’t had this situation, they may want to review the lease and make changes before a problem comes up.

Your lease should state the procedures for having overnight guests.

It may say how long they can stay without permission and when you must be notified.

If your lease doesn’t include this information, you’ll want to think about changes for the future.

All changes must be in accordance with your state law.

2. Find Out If They Will Be Staying
Talk to your tenant to find out how long the person will be staying.

If the situation is a long-term, but temporary arrangement, you may want to offer an exception and leave things the way they are.

For example, a tenant may have a family member visiting from another country who will stay for one or two months before returning home.

Your tenant will be responsible for the behavior of all guests, and you may want to remind them of this fact.

Also, let them know the guest is still to follow the rules of other guests and will not have the privileges of tenancy.

3. Add Their Names to the Lease
If you determine this is a permanent situation or at least long-term (say, six months or more), you will want to add them to the lease.

You will need to create a new lease and have them sign it as soon as possible.

Fail to do this step and you could end up with other issues, especially if the original tenant breaks up with the person or moves out.

The second person won’t be legally responsible for the rent if they aren’t on the lease.

4. Follow Up in Writing
You may need to send out a written notice to your tenant if you don’t want another person residing on the property or if they refuse to sign a new lease.

Refer to the specific area of the lease that shows the violation.

Be specific about what you want the tenant to do and by what date.

Include any consequences of not complying with your requirements.

For instance, you can say that you will begin eviction proceedings at a specific date if the additional person has not moved out or signed a new lease.

Before you take this step, consult with an attorney to determine your rights.

If the person doesn’t comply with your notice, you’ll have to be prepared to follow up with eviction proceedings.

Having an additional person in one of your properties isn’t necessarily a bad thing.
It can provide an extra source of income to pay the rent and help ensure you have a long-term tenant.

However, you have to protect yourself from the legalities that go with this situation.

When in doubt, talk to an experienced attorney to ensure you stay within the laws regarding tenants and landlords.

Who is Responsible for Rent If Your Tenant Passes Away?

One of the saddest and most complicated situations for a landlord is when a tenant passes away.

You want to be supportive to the family, but you also have to maintain a business perspective.

You need to understand your responsibilities and options if this should happen to you.

Sole Tenant
If the deceased is listed as the sole tenant on the lease, his or her estate is responsible for any expenses and outstanding rent.

In some situations, the estate may be required to pay the rent up until the end of the term.

In other instances, it may only be for the most recent month that the tenant lived in the property.

Some landlords only charge for the number of days the tenant’s belongings are in the unit while others may charge for the entire month.

It’s important to have this stipulation in writing as part of the lease.

Otherwise, you need to contact an attorney to help you determine the best course of action for receiving money owed based on state and local laws.

If you have insurance, you can file a claim.

Many insurance policies cover loss of rent due to the death of a tenant.

They may also cover other costs, such as cleaning up the unit if the tenant passed away inside.

Sometimes, a unit can have a stigma attached to it when someone dies inside, and the insurance policy may cover loss of rent for several weeks after the unit becomes vacant.

Joint Tenants
The situation is different if you have two tenants in a property and one of them dies.

The other person is still responsible for the rent if it was a joint tenancy with both parties sharing complete responsibility.

In this case, the current tenant would have to pay the entire rent or find a sub-leaser, if the lease allowed for one.

Technically, the surviving tenant would be responsible for the rent until the end of the lease term unless a new renter is found.

If the tenant wants to break the lease, he or she may have to pay a fine, forfeit the security deposit or pay out the rest of the rent, depending on the stipulations in the lease agreement.

Faced with this situation, many landlords work to find a new tenant to replace the current one, to allow him or her out of the lease with no penalties.

Any disagreement about whether the current tenant or the deceased tenant’s estate is responsible would be between the two parties.

As long as the lease stipulates that each tenant is equally responsible for the entire rent amount, you can require the surviving tenant to pay all of the rent.

Landlords often have to combine legal remedies with compassion in a situation like this.

They can begin by contacting their insurance company to see what coverage they have when rent is lost due to a tenant’s death.

The next step is working with the family members to arrive at a satisfactory situation.

If no resolution is found and the tenant’s belongings are not removed, the landlord may have the right of possession for the outstanding rent.

 

However, it’s important to work with an attorney and go through the courts to avoid being accused of theft.

Dealing with the loss of rent when a tenant dies is a complicated task, and one you should never try to figure out without solid legal counsel.

 

Working for Yourself as a Property Manager

If you have decided to become a landlord, congratulations!

However, before you jump in with both feet, you should be aware of some important facts and tips to help you be successful and avoid the pitfalls that plague many landlords.

1. Create a Contact List
Whether you manage two units, twenty, or two hundred, one thing remains the same: you can’t do it all.

Even if you consider yourself a jack of all trades and only have a few tenants, you’ll need help at some point.

Start accumulating names of people in various industries whom you can call on when you have a problem.

If you go to the same people, you will become a preferred client.

The next time your tenant calls for a heating problem at 2 a.m., your HVAC guy will be there first thing in the morning.

2. Create a Complete Policy
Set up a list of rules before you start taking in tenants.

Stick to the list no matter how much someone begs you to bend the rules.

By having the policy in place ahead of time, you won’t be tempted to give in because you feel sorry for someone.

This includes your procedures for processing applications and the rules you have in place for the residents.

3. Keep Up with Your Property and the Competition
If you have a well-kept property, it will be easier to find and keep the best tenants.

Work to maintain your properties in between tenants and while they are occupied.

Find out what your biggest competitors offer to win tenants, and make sure you offer something similar or even better. Think of any expenses you obtain as an investment.

If you don’t put money into your property, you won’t get money out of it with quality residents.

4. Figure Out When and How to Outsource
If you want your business to be successful – whether you have five units or fifty, you need to focus on the important things and outsource other tasks.

For example, you may hire a company to handle rent payments or a maintenance person to make basic repairs and maintain the property.

If you aren’t a people person, you may even want to hire someone to do the leasing for you and show the property.

Look at your strengths and hire people to do everything else.

5. Be Strict on Payments
Don’t fall into the trap of being the “nice guy” and letting your tenants get behind on their rent payments.

You have to treat this as a business, even if it’s a side job, and set rules about payments.

Tenants can tell sad stories, but you can’t give in to every one you hear.

Just remember, you aren’t doing them any favors, and you sure aren’t doing any for yourself either.

6. Think Like a Manager
If you treat your rental properties like a business, you must act like a manager.

All decisions should be solid business decisions, and you must implement and enforce the rules.

This is the only way you can be successful.

Don’t act like it’s a side job, a second income and definitely not a hobby.

 

Manage your tenants, your employees, your vendors, your time and your money.

If you have this mindset in all situations, you will find that being a landlord is a profitable business.

What Extra Measures Can You Take to Make Sure You Are Not Liable for Your Tenants’ Pets?

Many people like to get cats, dogs, or even exotic pets to live in their apartment or other rental.

Some landlords allow these pets to entice more applicants to their properties.

However, you must protect yourself from the liability that comes with animals.

1. Tenant Liability
In most cases, the tenant is responsible for the pet they choose to keep.

For example, you have a tenant with a medium-sized dog named Fluffy. Fluffy is usually friendly and wags her tail at everyone who comes by. One day, Fluffy bites a visitor for seemingly no reason.

The tenant is responsible to pay for any medical costs from the incident and the landlord isn’t likely to be held liable.

2. When the Landlord Becomes Responsible
If Fluffy had been a breed considered dangerous and had a history of aggression, the landlord could be held liable if they knew about it.

If the landlord allows a dog breed banned by a city ordinance, he or she could be liable if an incident occurs.

A landlord could be held responsible if they receive complaints about a dog and no action is taken.

While any pet can be a problem, dogs are most often the animal that causes problems for other tenants or outsiders.

If the renter keeps the pet and it creates an incident while in their care, they could be held responsible.

3. How to Protect Yourself
State laws vary based on what they interpret as a landlord’s responsibility.

It can be helpful to review previous cases involving dogs to learn how they were resolved and who was held responsible.

You can also check with on a potential tenant who has a dog to see if any previous cases have been made against the owner for the animal.

If you find a civil or criminal case involving the dog, you have grounds to refuse the application.

Another way to protect yourself is to require certain paperwork.

You can ask for tag numbers, proof of vaccination and rental insurance that covers dog bites.

By having this information in the tenant’s file, it shows you took reasonable action to ensure the safety of other tenants when you accepted a dog on the property.

If you have a tenant with a dog that has proven to be viscous, unsociable, and a possible menace, you can require the tenant to get rid of the dog or evict the tenant.

Your ability to take this step will depend on local and state laws, so check with an attorney or another expert before taking drastic measures.

You may not want to move right to eviction if you can find other methods of protecting yourself and others.

You can build a fence around the property—either bearing the cost or sharing it with the tenant.

You can post signs warning passersby and visitors of a dog on property.

 

The decision to allow tenants to keep a dog in their rental units can be a difficult one.

There are many aspects to consider, not the least of which is whether the landlord will be held liable if an incident happens with the dog.

Make sure you know your level of responsibility and take any extra measures to protect yourself.

Top 7 Legal Pitfalls for Landlords and How to Avoid Them

As a rental property owner, you are often a plumber, electrician or decorator, but you are probably not a lawyer.

Since rental agreements are contracts and states have laws that specifically impact landlords and tenants, legal pitfalls can open up underneath you.

Everything from poorly written rental agreements to responsibilities not outlined in a lease can crop up.

Learn about some of the most common potential issues and how to avoid falling into a legal hole.

  1. Everything starts with the lease. You can find generic lease documents at many stores, but what they don’t tell you is that those forms are not enforceable in every state. A single clause can render the entire document unenforceable. Be sure to talk with a real estate legal professional before choosing a lease document.
  2. Know your responsibilities. In addition to the interior of your property, most states also require landlords to maintain the exterior. For example, landlords may be responsible for snow removal and keeping grass cut to within legal limits. There may be a way to transfer those responsibilities to the tenant, but you would need to make sure that was clearly spelled out in the lease and legal in your area.
  3. Keep marketing clean. Before you post any ad or market an empty property, keep in mind that there are fair housing laws that specifically prohibit you from discriminating against prospective renters. This means you can’t advertise to exclude families with small children or avoid a specific age group, in addition to a variety of other protected classes. Essentially, you should not be asking questions about a tenant’s family situation, race, religion, or age when making a rental application decision.
  4. Screen tenants carefully. Even though careful screening should be a foundation of your rental business, asking the wrong question during an interview can be just as damaging as using the wrong language in an ad. Sure, you might not have made your decision to reject a tenant because they have small children, but asking could give them ammunition for a fair housing complaint.
  5. Obey privacy laws. Yes, you have the right to visit your property, make repairs and ensure it is taken care of. Your tenant has the right to privacy. Different states have different laws regarding how much notice you must give a tenant before visiting the property. Always notify tenants in writing of your intent to visit so they can make arrangements to be home. A single major violation could cost you significantly in damages.
  6. Keep late fees reasonable. No one enjoys dealing with frequent late payments, and the temptation is to charge punitive late fees to avoid the issue. Keep in mind that many states are now asking for proof of damage surrounding late fees. Excessive amounts might lead to a judgment against you that can become a major problem if every tenant jumps on board. A reasonable fee is defensible; an unreasonable fee is not, unless you can prove the financial losses due to the late payment.
  7. Return security deposits in a timely manner. Security deposits are only to be used for maintenance in excess of normal wear and tear. If a tenant leaves the property dirty, you could deduct a cleaning fee. If there is unapproved paint, you could charge the tenant for the repainting. You can’t simply keep the security deposit or deduct more than the cost of the repairs. You also can’t use the deposit for any refurbishing on the property. Courts can assess fees that equal three times the deposit or more, so keeping the security deposit too long or deducting expenses that are not the tenant’s responsibility can be very costly.

 

Options for Approaching Tenants With Short-Term Needs

Temporary or short-term tenants have very specific needs, but they can be a gold mine for landlords.

Short-term leases often carry premium pricing and, depending on local laws, the rates can jump significantly at the end of the lease term.

The trick is finding these tenants to keep your short-term vacancy rates as low as possible.

Add these simple amenities and follow these three strategies to help keep all of your short-term rentals full, all year round.

Adding Amenities
Short-term renters might be in town for a season or even six months with a contract job.

The shorter term of their leases often means that they will need a furnished apartment.

Working with a furniture rental company can give you the flexibility to offer an apartment furnished or unfurnished, on demand.

If you want to avoid the added expense, you can always furnish the apartment yourself.

Keep in mind that better furnishings can help draw in higher-end tenants.

Another major amenity to keep in mind is connectivity.

If a tenant is traveling for business, they may be working virtually around the clock. Make sure all temporary units are already wired for Internet service and include the cost in the monthly fee. This helps your tenants avoid wait times for installation.

Consider rolling all monthly expenses into the rental fee for short-term leases. Some companies pay the living costs for temporary housing, so a rental agreement that builds in electricity, heat, hot water, and any other utilities can be worthwhile to business tenants.

How to Attract Temporary Tenants
Once you have the unit ready, it is time to start lining up prospects.

There are many ways to connect with short-term tenants, and here are three that can boost your existing campaigns.

1. Contact companies
Start any search for temporary tenants by touching base with local companies that often use seasonal or contract workers.

You can set up an agreement directly with the company for a specific number of units.

This has several benefits, not the least of which being that even if the unit is not filled, you still collect rent. If something does happen to a unit, it might take longer to collect damages from the business, but you are much more likely to be paid without spending time in court in order to collect.

Other benefits of renting directly to the business is less time and money spent acquiring tenants. You won’t need to run multiple tenant applications or advertise as long, or at all.

2. Add “short term” to your ads
The easiest way to connect with short-term renters is often just adding the keyword to all of your materials.

Make sure that prospects see that you offer these types of leases, so you can leverage all of your advertising toward filling any type of vacancy.

3. Post on job boards
If you don’t want to work with companies directly, you can still take advantage of their hiring practices by advertising in the same places they do. If a local company routinely advertises for jobs on a specific board, add your own materials in the same place.

This will make sure every new contract employee also sees a place where they can go to find temporary housing.

When adding materials designed to attract seasonal or temporary renters, be sure to distinguish between short-term and month-to-month leases.

A month-to-month may not offer enough security for prospective tenants, but they may want to have the option available at the end of their longer term.

Offering both options can be a bonus when working with those who can’t say for sure how long a job will take.

Finding Balance Between Being Available for Your Tenant and Taking Time for Yourself

Being a landlord can take a big toll on your time.

A tenant might call at any hour to report a problem.

Sometimes, tenants expect instant repairs, even when the issue will take time to resolve.

Creating a balance between your tenants’ needs and rights and your own needs can be challenging.

You don’t want a major leak to cause thousands of dollars in property damage, but you also don’t want to field calls about a dripping faucet at 3 a.m.

Here are five tips to help you create a work/life balance suitable for a landlord.

1.    Have Office Hours
For most complaints, normal business hours is enough.

Make sure to have posted hours during which tenants can always reach someone.

This allows you to handle repair requests and issues without cutting into your family and friend time.

2.    Put Policies in Place
You can avoid a lot of hassle and complaints by simply having a tenant policy.

In your policy, you can include information about payments, due dates, repair request procedures, responsibilities, and more.

The more comprehensive your policy document, the less likely you are to receive random requests.

You should make requirements for rent very clear so that extensions do not become a regular request from tenants.

Online payments help to streamline the process.

Paired with a clear and automatic late fee, this should help cut down on the need for court filings for missed payments and evictions.

3.    Never Provide Your Cell Number
Google Voice and other call forwarding services allow you to give tenants a contact number without giving them your mobile.

They need to be able to contact you, but you don’t want to deal with non-emergencies during family dinners or celebrations.

A number that forwards calls depending on the setting can be invaluable for protecting your time.

4.    Consider an Answering Service
An answering service allows tenants to always talk to a person and leave a message.

If the situation is truly an emergency, your answering service can contact you.

This lets you have every call vetted, without personal oversight.

The less time you spend answering calls, the more time you have to enjoy an evening out.

Plus, with an answering service, you know you will never miss a real emergency call.

If a water main breaks or there is a fire or other emergency, you hear about it almost instantly.

You can minimize property damage while maximizing your off hours.

5.    Have a Handyman on Call
For those times when you’re on vacation, you still need someone available to handle repairs.

You can either leave a contact number and spend some of your vacation lining up visits from a service person, or you can find a handyman and discuss budget limits before your go.

If you have someone on tap to provide emergency assistance, you can avoid the need to be available when on vacation.

Ultimately, communication between you and your tenants is one of the best ways to preserve your work/life balance.

If they know you are going on vacation, they are less likely to bother you with something that can wait.

Of course, it’s always best to schedule trips in the middle of the month to avoid missing any rental payments.

This way, you can go on holiday without worrying about missing a check or possible court date.

Accepting or Giving Gifts to Tenants for the Holidays

The holiday season includes giving (and getting) gifts.

As a landlord, you’ll probably receive numerous gifts from vendors and other business partners as a way to thank you for your business.

You may wonder about passing that goodwill on to your tenants.

Should you give them a gift, and if so, what are the guidelines?

And what about those loyal tenants who want to give you a gift?

Why Giving Gifts to Tenants is a Good Idea
Handled correctly, giving gifts to your tenants is a great way to inspire loyalty and goodwill.

Your tenants will appreciate being recognized as more than just a rent payment.

When you do give a gift, you should express your intentions in words. Just a quick note thanking them for their tenancy will let them know how you feel.

If you only have a few small properties, you may even want to personalize the note with the tenant’s name.

What Kind of Gift to Give
Gift baskets and gift cards are always popular with tenants.

Try to consider the recipients when selecting a gift.

For example, if most of your residents are college students, consider gift cards to Amazon or iTunes.

For single professionals, you might give a small household tool kit.

While you are responsible for major repairs, they can tighten a loose screw if they have the tools.

One of the most popular options is money off the next month’s rent.

Nothing commands attention like money, and it will show that you care about more than just earning a profit.

Throw a party for your residents. It doesn’t have to be lavish or time-consuming. You can schedule a specific time for a couple of hours when everyone can get together, or you can host an open house where people drop by a common area or the leasing office when they have time. A few cookies and snacks with soda will make a big impression without taking up a lot of time.

Gifts From Tenants Who Love You
Most of the time, your tenants will consider paying the rent your annual holiday gift. However, there are a few who may want to show their appreciation in other ways.

If you went above and beyond or made exceptions to the rules to help them out, they may take the holidays as a time to express their thanks.

Receiving a gift can be more difficult than giving one.

In most instances, it will be a nice Christmas card with a batch of cookies or loaf of homemade bread. You can easily accept these gifts in the spirit with which they were sent.

However, you may feel uncomfortable accepting a gift with a higher price tag, such as a gift card for a fancy restaurant or an expensive bottle of wine.

Accepting gifts isn’t illegal, but it can make you feel uncomfortable.

You may feel it insinuates a special relationship that you don’t have with other tenants. In this case, the best option may be to politely decline the gift.

You can offer an alternative, such as asking them to make a donation to your favorite charity. Always acknowledge their gift with appreciation, even if you are declining it.

Use the holidays as a time to foster positive feelings between you and your tenants for the rest of the year and into the next one.

At the same time, make sure you maintain a professional relationship in all of your decisions.

 

Should You Ever Accept Cash from Tenants?

Many landlords wonder about which types of payment options they should accept from their tenants.

What if your tenant doesn’t have a bank account or use checks?

Is it safe to accept cash from tenants?

Every type of payment option has its benefits and downsides, so it’s critical to assess what’s most important to you, whether it’s transaction fees, security or convenience.

Here’s a look at the pros and cons of different payment options:

Cash
Many landlords prefer cash payments for several reasons.

Unlike a check, you don’t have to wait for it to clear, and there is no risk of a bounced check. While cash is a safe option, it’s extremely important to provide your tenants with a receipt (make sure to keep a copy for yourself) so you have a clear paper trail if any discrepancies arise in the future.

The main drawback to cash is that you or someone who works for you has to meet with the tenant in person to collect the money, a time-consuming task if you have a lot of tenants.

It can take even longer if you’re driving to different properties. Even if you ask your tenants to come to you, they may accidentally or purposefully miss the meeting time.

For all of these reasons, cash typically works best if you have very few tenants, and the tenants live close by.

If time isn’t an issue, however, collecting cash payments gives you a good opportunity to check in with your tenants.

Money Orders
If your tenant does not have a bank account, you may also consider accepting money orders.

These are considered safer than personal checks because they are backed by a third party.

Tenants will have no trouble obtaining one, as they’re available at the post office, big retailers and many drug stores. In addition, money orders can be mailed to you, so you don’t need to waste time and energy personally meeting with all of your tenants every month to collect payment.

The downside is that, even though it’s difficult to cancel a money order, it’s still possible.

Also, your tenants will have to pay for the money order each month, which they may not be happy about.

Money orders are a good option if you have several tenants and want the convenience of having payments mailed to you.

Just make sure your tenants understand that they need to purchase one every month.

Credit Cards
If you’re dealing with tenants without bank accounts, you can also accept credit card payments.

It’s very simple to set up a basic merchant account with PayPal.

The site is completely secure, and you don’t have to worry about checks or money orders getting lost in the mail.

Tenants find it very convenient and easy to use, as most people are already accustomed to paying their bills online. You can also send invoices electronically.

Just be aware that PayPal will charge you a small transaction fee, so this option is best if you don’t mind paying a little extra for convenience.

If your tenants don’t have bank accounts or don’t want to write checks, you can still find a payment option that works for everyone.

Just make sure you carefully consider the benefits and costs of each method before deciding which payment options to accept.

When Is It Better to Just Get the Tenant Out Rather than Go Through the Eviction Process?

The word “eviction” usually brings to mind a long, stressful process ending with sheriff’s deputies knocking on a door and a tenant’s furniture piling up in the street.

But in reality, it’s not uncommon for a lease to end early without a formal eviction.

Keep this information in mind if you’ve got a tenant who you want out of your rental property, but want to avoid official eviction proceedings.

How Do You Get a Tenant Out Without Eviction?
In nearly every case, the answer is short and to the point: cash.

With few exceptions, the only leverage you have against a tenant who wants to stay while you don’t want to initiate eviction proceedings is a buyout.

If you’re lucky, your tenant will agree to the cheapest offer, like an amount high enough to cover their first month’s rent in a new apartment, or an agreement to waive their existing rental debt to you.

However, if you’re trying to remove a tenant without eviction, it’s likely that they know they have the upper hand, and may demand a payment high enough to cover their every expense, like full relocation costs, and full first month, last month, and security deposit costs for a new lease.

Still, there are times when you’ll be willing to pay even high amounts, like the following scenarios.

You’re at Fault
Topping the list is a situation where your tenant has legitimate legal claims to bring against you during eviction proceedings.

This category covers even the smallest liabilities on your part.

Did you delay a little too long repairing the furnace last winter? Did you push back against a tenant request for pest extermination?

Those instances may have seemed small at the time, but if they technically violated tenant rights laws in your area, they can and will be held against you in eviction court.

You’ll also need to keep in mind cases where you didn’t even realize you might have been at fault.

In particular, many areas have laws protecting tenants against harassment, especially during a rental dispute. While it may have been normal for you to swing by a rental property to check in twice a month, if the relationship sours and eviction is in the air, your tenant might have a claim that your frequent visits amounted to harassment.

Carefully review every letter of the rental laws for your area, and make sure there are no situations where you might be found at fault.

Eviction Would Cost More
In many areas, once eviction starts, your tenants often won’t suffer any consequence if they simply stop paying rent. If eviction proceedings last for months, that’s months of income you’ll be missing out on.

In a situation like that, if you can make an offer of compensation to the tenant that’s less than the cost of eviction, the numbers will make it clear.

Run the math, and then use your results to determine how much of a pay-off you should tempt your tenant with.

The same logic holds true in a situation where you need the tenant out “at any cost.”

This situation may arise if you’re planning to sell the property at a substantial profit, but the sale needs to close soon to be successful.

Alternately, landlords in big cities often find that their property taxes have spiked sharply, leading to a similar situation where you need to sell the property immediately.

In any scenario, the ultimate question is a simple math problem: Does it cost you more to evict than it does to buy a tenant out?

If the answer is yes, then it’s time to get in touch with your tenant and start negotiating.