MB Sessions - Becoming a Land Lord

[brianb_cobbres]

Becoming a LandLord.

The number of houses in the Georgia MLS broke 100,000 this morning meaning they added 10,000 properties in the past 3-4 weeks and 25,000 in the past 3 months. I, for one, have decided to stay away from any project that requires a traditional resale as there is simply too much inventory to make it practical. I will be looking for projects that I can hold as rentals, possibly owner finance, or create specialty housing using Universal Design or ADA guidelines to set the property apart from the traditional inventory.

Anyway, I know very little about being a landlord and figured that we have a number of members in the same position so I am starting this thread as a open discussion on becoming a landlord.

Please post links to any resources you find relevant, post any forms or documents you are willing to share with the group, link to other MB threads about land lording. I am also looking for tips or tricks, general comments, answers to questions, tenant stories (good and bad), or any information you think may be helpful to a new landlord.

So please post of questions or comments and lets keep this thread going.

Note, I will be moderating this thread to keep it on track if necessary.

[brianb_cobbres]

http://www.magicbullets.com/forum/showthread.php?t=4756


Here is some good reading from another MB member.

[Debbie]

To provide educational purpose to our Magic Bullets Fambly, I will bring up our criterias and why credit report is important to Jeff and me.

When I talked about the credit report, I was not referring to just the FICO score. I talked about the whole credit report that showed the number of accounts, closed/open accounts, days of late payments, bankruptcy, the amount of whole debts, etc.

The credit report is the last item on our list prior to accepting/reject potential tenants.

Among our criteria lists that must be accomplished between 24-72 hrs, depending on days of the week & holidays:

1) Have applicants fill out the WHOLE rental applications. If applicant left out areas such as social security number, employment name/phone number, etc the potential tenant has just rejected himself.

2) Reverse phone numbers that applicant provided on rental application.

3) Check to see if potential tenant is listed in the National Tenant Rating Bureau, also known as "The Deadbeat Database".

4) Check County Building for potential tenant's Landlord's name & address to verify it is the potential tenant's landlord's property.

5) Contact last 2+ landlords, including current landlord. Although we generally ignore any positive comments from current landlord but we do want the current landlord to be aware of his/her tenant looking to relocate.

6) If at all possible, drive by and/or knock door of potential tenant's current address. Check to see how potential tenant treats the rental home as well as see evidence of potential tenant's care of pet (if any).

7) Contact County Building for criminal and bankruptcy checks.

If any of the above criterias did not meet our expectations, we reject the potential tenants. We simply convert the cash (for credit check) into money order or cashier's check in the mail without any letter or note of explanation.

If the potential tenant passed all of the above criterias, we pull credit report that includes any additional information such as "Does not match" infos, resided in other county/state, payments on time or not, debt ratio, etc.

The above are the main but not all of our criterias mentioned in this post. There are little things not mentioned such as age (18+), must have 1+ yr employment, etc.

Although the credit report (almost ignoring FICO scores) is the last item of our criterias but it is very important to us. Although it might not be to the minute's up to date but it does contain fairly accurate information regarding the debt ratios and late payments.

FYI---we do totally ignore medical bills on the credit reports for obvious reasons. Aldo mentioned about ignoring college tuitions, that subject never occurred to us therefore it still will not be included in our criterias.

[Debbie]

Brian,

Here's what was posted a few months ago....Sample forms such as pet addendums, Rental Agreement, Security Deposit, etc.

http://www.magicbullets.com/forum/showthread.php?t=5563

[dealmaker]

I always strove to find the most STABLE, high quality tenants I could. I expected them to take the BEST CARE possible of my property.

I found that my management problems went down, and my profitabiklity went up when I required a MINIMUM TWO YEAR lease. If they weren't stable enough to commit for two years, they weren't stable enough for me.

Any time I did ANY repairs, I always "upgraded". That meant that the "entry way" had ceramic tile, which was cheap and neutral. Gave a great first impression when they walked in the door.

I didn't use particularly higher end carpet, except in some of the higher end houses. BUT I did use HEAVIER, REBONDED carpet pad. It gave a much nicer feel underfoot. BTW, I met my carpet guy through our REI club, he had no "retail looking showroom", he was in an industrial/warehouse district and did mostly hotels/motels, apartment complexes and some pretty big property management companies. Unbelieveably good deals.

I used the standard (TX Real Estate Commission) lease with my own provisions added; These included, but were not limited to; No changing oil on property, no more than 2 REGISTERED motor vehicles, no UNREGISTERED motor vehicles.

Can't think of anything else now.

dealmaker

[brianb_cobbres]

And one more bump for good measure

[SoldierInvestor]

Deb,

Thanks for the sheets and they will come in good use!!

zach