Do you rent your properties out to others? Help please.

[HeatherFL]

I bought a condo in March as an investment property and plan to move within the next month. I want to rent it out. Does anyone have advice on what to do? Credit checks, lease contracts, etc.

I really appreciate any insight and feedback. THANKS SO MUCH!!!!

~H.

[diam124]

I work in property management and these are the things we do in order to rent to someone:

1) Application - you can probably find an application template online somewhere. You need basic biographical info on everyone applying - name, SS#, current and past addresses, employment history (with salary info), bank info (although we don't do anything with it), criminal history ("have you been convicted of a felony"). We also have them fill out a rental verification form in order to contact past landlords (they fill in the name of the place and sign the consent form and then we fax it to the landlord and have them fax it back).

2)We call to confirm employment and salary. Our requirement is that they make 3 times the monthly rent per month (gross pay).

3) We do a credit check. We don't have a "magic number" that their credit score has to be above. We look at them on a case-by-case basis. If they have collections, we are generally willing to look past medical collections (as long as they are not huge). Ulility collections (phone, power companies) are a red-flag and any collections from past landlords are a huge red flag. We also look at how much debt they have.

4) We do the rental verification. Try to get as much info as possible - any sort of violations (noise complaints, not paying rent, late paying rent, damages, etc.).

The lease we use is a template from the state landlord tenant act. You can probably find something similar online.

My only advice is to be very selective in who you rent to. I know I would be if I actually owned the place!

[StephB1170]

heather,
We have 3 rental properties. I have an application already if you want me to email you a copy. I have to say so far we have been really lucky- we just do reference checks and pray!!! :D

In the future we will have to get more involoved but so far we are going with our gut instinct.

[jennylou]

In the future we will have to get more involoved but so far we are going with our gut instinct.

Please be very careful with this and make sure you have written requirements as you do not want to be visited by the fair housing authority in your area. Even if you aren't meaning to discriminate if you don't have some sort of requirements that you follow for everyone you could be in some serious trouble.

Our credit checks are similiar to the PP. We ignore medical bills. We pay very close attention to utilities as they NEED those and any landlord bills (b/c they'll do the same to you). I also check with previous landlords. It's amazing what you'll learn. We have a check which will pull many previous residences and we like to call those ones as well. Also, don't necessarily go by who they put down as the landlord, they lie at times. I always verify with the county auditor's office (may be a different office in your state/county) as to who owns the property (we pay $14 per year for unlimited internet access to these records), then you can look them up in the phone book or a reverse lookup has also helped us in the past.

We also run criminal and eviction checks. Evictions are a big red flag for us, though some do have logical explanations and if we call the landlord and the prospective tenant has paid up with the landlord, I will overlook it.

Look around for a local landlord association. They are very helpful in learning the applicable laws in your area. In addition, they can also offer you discount with local businesses. And, if you have a leaky pipe, they come in handy if you don't have the know how to fix it yourself.

You also want to be sure that you can rent the unit for more than the insurance/taxes/mortgage and any utilities/HOA fees that you will need to pay.

[HeatherFL]

Thanks, everyone!!!

~H.

[HeatherFL]

I just wanted to THANK you all! I just got tenants! Hallelujah Choir!!!! I'm a Landlord! LOL I never thought in a million years I'd have that title!

ETA: I did the credit/employment check too.

~H.

[lelee17]

HI Everyone!

I have a question about renting out properties. DH and I will be renting out our current house and moving out of state (to AZ) and I was wondering...

-Are we required to provide our renters with appliaces? i.e., washer/dryer, refrigerator?

I know that might be a no brainer, but I am completely new to the world of renting.

Also, if anyone has any website references, that would be great.

Any advice would be appreciated!

Thanks!

[jennylou]

Re appliances: It may vary from state to state.

Websites: www.mrlandlord.com

Good luck. :)

[KRK]

shamocha17 you're not required to provide any appliances. however, if you do just remember that you're liable for all repairs to those appliances. Since you're moving out of state, I'd probably leave the appliances for the renters and save my self from having to move it.

definitely read the California Tenants: A Guide to Residential Tenants and Landlords Rights and Responsibilities
http://www.dca.ca.gov/legal/landlordbook/

Since you are moving quite a distance away I'd also recommend looking into property mangement companies. That is unless you have someone trustworthy close by that can help you. We didn't hire someone right away for one of our properties and it was a HUGE PITA to deal with the tenant. He was always calling us (at least once a week) for every little thing. Also, anytime anything was wrong we'd have to find someone to fix it or travel quite a distance. Plus, you have a huge liability and so many damn rules and regulations to deal with that I just passed on the responsiblity to professionals.

One of the most expensive things you have to deal with for rentals is evictions. Not only do you have to pay for the mortgage on the home, but you also have to pay $$$ to go through the process. It's also really expensive to find tenants. So PLEASE make sure you do all the appropriate background checks to help find a decent tenant. I paid thousands and thousands of dollars to evict someone and paid even more money to repair the home.

I'd also recommend you charge a more competitive rate on your rental to ensure that you find tenants quickly. You don't realize how much $$$ things cost us just to find renters. For example, we wanted to charge $2200 for a home. A smaller not-so-well-maintained home a few blocks away was only renting for $1800. It took us 4 weeks to find someone, but spent ~$800 in advertising fees and it cost us ~$2K for the mortgage (~$2800 total). So for the year we got $2200 X 11 months = $24,200. But it cost us $2800. So really we only got $21,400. If we would have only charged $2K/month, paid $200 advertising fee, and got renters right way. We could have gotten $23,800. We could have saved ourselves $2,400 and a lot of time and stress!

I'd also recommend for anyone with rental properties to be sure to up your insurance coverage with your homes and cars, because if anything should happend you don't want people to come after your assets. It doesn't cost that much more, but gives you more piece of mind. If you can afford an umbrella policy it's even better.


Lez, if you have any questions, you can always email me or catch me on LJ.
Karen