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walkin_yesindeed

landlords, can I learn from your experiences please?

walkin_yesindeed
14 years ago

We are renting out our home for the upcoming academic year (and I'll be posting from Peru and Germany!) to a woman we don't know well personally, but many of our friends know. She comes very highly recommended and seems extremely reliable, good-natured, easy to get along with.

We don't own rental properties, and this is our first time dealing with a rental, so we are not sure of the process. Hence this post.

We are going to have her sign a formal contract and walk-through, and we are asking her for a security deposit even though we're relatively sure we won't need to dip into it. We will have a handyman on call for her, who knows us and our house well, and we'll pay him monthly as well as give him a key, so that he can occasionally wander in and check things. The neighbors, whom we trust, will also have keys. She's OK with all this.

So, a few questions:

Do you all use a standard contract and walk-through form?

What would you advise we keep in mind as we embark on this new experience (of renting -- we've spent a fair amount of time in Peru and Germany already...)? Are we missing anything important?

Thanks, everyone.

Comments (25)

  • IdaClaire
    14 years ago
    last modified: 9 years ago

    My ex and I used to own rental property, and aside from one tenant who could never seem to pay on time, and moved out without a required 30-day notice to us (for which reason he forfeited his security deposit), we didn't have any real problems. As I recall, we did use standard forms. I work with attorneys, and they basically "cleared" the forms we intended to use before we presented them to the first tenant.

    One thing that I feel important is to make certain that your tenant maintains renter's insurance to cover any loss of her personal property in the case of fire, theft, etc. We did have a stipulation in our lease agreement that the tenant agreed to maintain renter's insurance in full force at all times, and provided that we, as lessors, were not responsible for the tenant's personal possessions in the event of loss. I think that's fairly standard. I believe we also required our tenants to provide us with proof of insurance prior to move-in. It's been a few years, so I'm trying to remember exactly how everything panned out.

  • johnmari
    14 years ago
    last modified: 9 years ago

    Credit check and criminal background check!

  • pammyfay
    14 years ago
    last modified: 9 years ago

    Not a landlord, but I would think of doing one thing: Removing any items that you are particularly fond of or that are expensive (if you can physically move them), and asking a trusted friend to house them, safely, wrapped properly, until you return.

    I would just want to be able to look around the home before I hand over the keys and confidently say to myself, "If this table was damaged, I would be OK with just taking money out of the security deposit."
    I can't say that when it comes to some items that are sentimental (like some glass boudoir lamps that were my Mom's).

  • IdaClaire
    14 years ago
    last modified: 9 years ago

    Well, jeez - why don't I learn to read before posting? LOL! Sorry - I just re-read your post and see that you are renting your home to her, not a rental property. In that regard, my comment on renter's insurance may or may not apply, as she might not have any personal belongings other than clothes, toiletries, etc. (Is she bringing her own furniture or electronics?) I would suggest you check with your insurance company to be sure that you and she both are covered while she is renting the home from you.

  • graywings123
    14 years ago
    last modified: 9 years ago

    As others have said, you need to get the insurance issue pinned down.

    I can't believe she is OK with neighbors and a handyman having keys to the house so that he can occasionally wander in and check things. There is the potential for all sorts of problems there. What is something of hers goes missing?

  • Ideefixe
    14 years ago
    last modified: 9 years ago

    I agree with Graywings--you're setting yourself up for all sorts of problems by giving the handyman and the neighbors keys and carte blanche. At the very least, you need to stipulate that both the neighbors and the handyman need to contact her in advance of their visits. (Most rental agreements say that the landlord must give the tenant 24 hours notice).

    Worst case scenario: somehow, someway, one of those keys gets into the wrong hands, and an intruder attacks her. She'll sue you.

    I'd limit the number of outstanding keys to one person. And if I were in her shoes, I'd never agree to a drop-in handyman.

  • terezosa / terriks
    14 years ago
    last modified: 9 years ago

    I think that you need to learn about your state's landlord/tenant laws, as they will apply to you. While landlords do have the right to inspect their property, they do not have the right to drop in at any time. (or have their representative drop in)

  • IdaClaire
    14 years ago
    last modified: 9 years ago

    The above posters are correct. In most states, landlords are required by law to give the tenant sufficient notice (which may vary by state) before entering onto the premises. (Emergency situations may be an exception.)

  • Bumblebeez SC Zone 7
    14 years ago
    last modified: 9 years ago

    We have many rentals although most are low income types.

    The main thing we know? The nicest people can look you in the eye and lie about everything.
    Also, you may very well need her security deposit to clean carpets, paint and make small repairs and that is fine.
    Treat her nicely but keep it business like at all times because it's not personal.
    Your house does need to be up to codes in case something does happen and she wants to sue you.
    For example, a wobbly front railing that an energetic kid swings on (but you've always been careful with) and falls and hurts himself.
    We've never been sued, btw.

  • squirrelheaven
    14 years ago
    last modified: 9 years ago

    Speaking of up to code, check out the electric and fire codes. Our electric codes have changed, with respect to GFC outlets, for example, and must be updated before resale.

    I would never lease a place where multiple keys were out there, or where the handyman could just stop by and check things out, esp as a female. I also have found that workmen are quite nosey and wouldn't want them there when I wasn't.

    An apartment complex I had rented at, many years ago, had access at any time, with or without permission. I came home sick one day and a workman just walked into my place as I was sleeping in the next room. I didn't know they were doing that!

  • bestyears
    14 years ago
    last modified: 9 years ago

    We rent out our former home in the Bay Area, and have done so for about a dozen years. We've had very good experiences. However, based on that, I would say, "Don't expect renters to keep your house up to your standards." The first year it broke my heart to see my perennial garden dead in the dirt (all they had to do was push a button and the watering system would turn itself on and off, but they didn't). Also marks on walls, crud, etc. -just expect it. It can be redone when they leave. Also, we had to change our homeowners to landlord insurance to reflect the fact that we had a tenant.

  • squirrelheaven
    14 years ago
    last modified: 9 years ago

    I'd also be concerned about any natural stone you might have around on the counters or floors, with regards to staining or deglossing from improper or untimely care.

  • golddust
    14 years ago
    last modified: 9 years ago

    I used to work in property management. I don't know about your state but in our state, a landlord must give warning and set up appointments to enter a tenants residence. We worked around the tenant's schedule whenever possible.

    The only time we could legally enter a residence without notice is if there was an emergency, like a bad gas leak, broken water pipe or fire.

  • moonshadow
    14 years ago
    last modified: 9 years ago

    Landlord/property mgr of several single family homes here. I have all kinds of stories I could share with you, pages worth. Pardon the length. I've tried to condense tips, suggestions, what I have learned from the school of hard knocks. True stories included as illustrations. ;)

    1) Cover yourself insurance wise. Since you won't be occupying the home as homeowner you'll need to get Dwelling and Fire coverage. Make sure liability portion is ample in case someone gets hurt. Keep in mind this coverage is for structures and liability only - no contents. Tenants must secure Renter's Insurance to cover their personal belongings. You can't necessarily make them get RI, but I put a clause in the lease that tenants are urged to do so and mention Owner's insurance does not cover tenants belongings. Another way to cover yourself. Also, I have heard (but have not checked into it), that when renting out your own primary residence and there's a mortgage involved, that doesn't always fly well with lender, who does not like to see D&F Insurance on the house. (Don't take that as gospel, tho). Check with an agent other than your own, so you can get an idea without giving your agent a heads up.

    2.) No matter how good someone looks on paper or in person, you will not know how they live until they actually are inside your house. Our rentals are 'starter-mid level homes'. I know someone who owns several pieces of pricey real estate in Chicago's Gold Coast area (cream of the crop). Rent is multiple thousands a month at minimum. Tenants are top execs, attorneys, MDs, etc. Same horror stories with damage and not paying $ as I have experienced.

    3.) The Lease. I have one that has been tweaked over ten years, adding clauses as issues have arisen. Attorney approved. Also, know your State's Landlord Tenant laws. It will turn up in a google search and most are not that difficult to comprehend. I can email you a blank of the lease I use, if you like. You might have to tweak it to suit your state laws. I use a term lease tho. Knowing what I know now, and were I in your shoes, I'd absolutely do a month to month lease. Googling will produce free sample leases too. (I've done monthly with tenants I was doubtful of, it is worked out after several months I put them on longer term.) Yes, a monthly lease gives your tenant a chance to bolt before you're ready, but heaven forbid something goes terribly wrong, you can get them out fast. On a month to month, you only need give 30 days written notice, no matter your reason. Uncle Marv just got paroled and needs a place to stay, you're returning early, doesn't matter. On a term lease, once they're in, they're dug in and if something goes south you're going to have to go through some legal maneuvering to get them out.

    4.) I would not, repeat not, leave keys with a neighbor. You are leaving yourself wide open with that one. Once your tenant signs on the dotted line, your house immediately becomes their home and laws are in place so it's respected as such. Even if your prospective tenant says she doesn't mind now, odds are she will start to mind once she's settled in.

    A handyman under contract (and I'd have a written contract with him) would probably be OK since you're away. But do check his background for sure (see #5 below). You're going into an arena where for your own protection and that of your tenant you cannot take anyone's word for anything. And you must check your State laws on entry. Nearly all have stipulations. LLs or their agents cannot just waltz in unannounced. My State is not explicit, other than I have to give 'reasonable notice'. Doesn't stipulate a time line or that it be in writing. Some States do require xx days written notice to enter (emergencies are by and large excluded). Typically I give 24 hr verbal minimum for repair (I strive for fast turn around time, keeps everybody happy). And I always try to do repairs when tenant will be home. Another measure of protection. I also do not let contractors in unaccompanied, whether tenant is home or not. I go along, stay nearby, and leave with them. If tenant is not home, I call tenant when I'm entering with contractor & again when leaving/locking up. I will say however, that I have never had the need to do a formal inspection. Typically repairs or calls for assistance require my presence inside the home at least several times a year, so I take that opportunity to look around. I don't snoop, do look past dust bunnies. I'm looking for evidence of abuse or neglect, such as holes punched in walls or a toilet leaking that I wasn't informed of that has now trashed the bathroom flooring in a week's time (yes, that's happened). When I saw the curled up flooring at base of toilet I got an 'oh yeah, I've been meaning to tell you about that...'

    So in your circumstance, you need someone trustworthy, no criminal record, who will respect the tenant's rights (that's so critical) and abide by your State laws. Otherwise, you're headed for trouble. You might consider a property manager who hires out their services. (In my area they generally take either a month's rent up front or a percentage of monthly rent as their fee.)

    5.) Credit Check. Yes, absolutely do a credit check. I stopped ordering them because the agency I use, due to ID theft, has raised fees through the roof and amped up security requirements. Understandable, but I'm too mom and pop for the high fees and required quarterly inspections of my home office at $200 each to make sure it's all under lock & key. (It is, but the fees in total are killer.)

    Another thing, keep tenant's private paperwork in a secure, private place, preferably in your possession alone unless you hire a Prop Mgr. You have to be careful when handling people's credit reports. Certainly do not discuss with neighbor or handyman! I use a locked fire safe.

    Anyway, what I do now is request tenants provide me their own when they hand in their Application. Easy enough with such ready access these days. AnnualCreditReport.com is one I commonly recommend, it's the only FTC approved site that doesn't have a bunch of strings and gimmicks. And it's free. Benefit to you and tenant is SS# and all account numbers are almost (but not completely) X'd out. So, unless you are ordering a credit report or background check, you won't need their full SS#. And sure don't need bank and CC account #s. The latter especially is info I personally do not want in my possession. Bank account & CC#'s are of no benefit and I want no fingers pointing my way should someone have their ID or CC# stolen.

    Oh, and on credit reports, don't hold medical bills against people. That's a real gray area prone to billing areas. That advice came from a mentor who manages a very large local complex. Then later I had my own first hand experience. My credit was impeccable. Had major surgery at a Chicago hospital, inpatient. A week after I got home I got notice in mail. Some goofball clerk had sent my bill (at the time not even fully tallied up) to collections two days before I was even discharged. Miserable and all stitched up, I had to have someone drive me back up there to get it straightened out.

    6.) Background: All you need to do a baseline freebie background search is a full name, DOB, and a prior address for match up purposes. Most local County court dockets are online now. Keep in mind it won't show if your tenant was in a federal prison, but if a quick local search reveals something you can stop there and reject them. If that's clean, then consider a national background check. For local, go to the County web site of residence where your applicant lives (or has lived) and run their name through the docket. That's where a DOB, last 4 digits of SS# or prior address comes in handy, to make sure your Sue Smith is the same Sue Smith on dockets. Everything will show, from speeding tickets to divorce. It paints a pretty good portrait of their lifestyle. Look for behaviors or items that could manifest as rent payment issues or damage to your home. Do not under any circumstances rent to someone who has been Evicted or has a Property Judgment against them (they've been convicted of damaging someone else's property and were taken to court because they didn't pay). Docket and/or credit report will show if Judgment has or hasn't been satisfied. Even if satisfied, I still automatically reject them. Be wary of those with domestic assault charges (generally means walls get punched too), restraining orders filed against them, been in arrears on mortgage and taken to court, things like that. (My state has a new law, however, that I cannot decline someone who has requested a Restraining Order against someone else.)

    I just turned down what I thought was a very nice woman because docket showed she was involved in a traffic accident (no biggie) but apparently she got ticked off enough to clock the other party, resulting in her getting charged with battery.

    You may or may not have to send rejection in writing if you reject your applicant. Be careful there as well. You can easily turn someone down based on bad credit. You might not be able to legally turn someone down like my girl with the battery charge, but I did it anyway because her credit history had some questionable items, so that was my out. No way do I want someone with that kind of fuse and temper in one of my houses, walls and doors will get the brunt of it.

    As part of screening, do check your local sex offender registry. For handyman too.

    7.) Personal Interview/Walk through. I promise you, based on experience showing properties, many people will hide or try to slide all kinds of things past you. So you've got to meet your applicant in person, walk them through, engage them in related conversation and listen well. 'Read' them, and do take an hour or so and do your research homework. It will spare you much grief. (Another gal I just showed a house to seemed to have potential till we were wrapping it up and she said "My mom always taught me when I break a lease to make sure I leave the house clean and leave the Sec Deposit, so you wouldn't have to worry about that." She thought she was getting brownie points, but in reality she had just disqualified herself because she essentially told me she habitually breaks leases and has no problem doing so.

    Your call whether you want to have a checklist ready at walk through. Not a bad idea if there are known issues such as a chip in a wood floor or nick in a tile, etc. Freebie checklists are online too.

    8.) Checking references. Get them for prior LLs and employers and call! Do not permit cellular numbers for any prior landlords or employment. Land line only. Can't tell you how many times I've checked references on a cell # and it's a friend. So I won't accept them anymore. Once I have the land line # I got to whitepages.com and do a Reverse Lookup and make sure landline # matches up to name and address of reference. (You'd be surprised how many times it does not.) Also, when a prior rental address is given and prior LLs name, go to assessors or recorders office online and make sure the owner of that address is the same person they've put down as LL. (I've had that fudged, too. Example: John Smith listed as reference/owner/LL of 123 Maple St. where tenant lived from 2002-06. Look up 123 Maple Street in tax records online and see Bob Brown owned it during that rental period. No mention of John Smith ever owning that property. So I go to whitepages.com, get Bob Brown's phone #, give him a call. And that's when I usually get an earful about how the applicant trashed the place and bolted owing $$.

    Also, don't rely on current LL. Often they give good reviews to get a bad tenant out. Go at least one prior LL back, they will be much more honest. That's where you'll get the real scoop, good or bad.

    9) Security Deposit. By all means, get it. It's uncommon not to. And make sure it's ample. I currently charge $1000 SD for monthly rent under $1000. Monthly rent over $1000 I charge the monthly rent amount as Sec Dep. With higher materials/labor/repair costs today it's necessary to get a bit more. Again, check State laws, but in most cases SD is never to substitute for last month's rent as some tenants believe. It's for damages, lost income if they bail early, etc.

    I can also promise you that sometimes really stupid things happen that common sense could have prevented and it shouldn't come out of your pocket. (Had two separate tenants at two separate houses fail to remove storm door chain and pin hinge so door would not be restricted upon opening. So move-in day they swing door wide open to allow for furniture. One house storm door broke completely away from door frame, cracking frame. The other one it caused the hinges to break. Not a good start there.)

    Watch state law on that too, many say Sec Deps cannot exceed equivalent of 1 1/2 months rent.

    And spare yourself a ton of grief and do not allow candles of any kind (clean burning or not). Just this winter I had a clean up bill to the tune of nearly $2400 on a little 2 BR because of candle soot. Painter sealing it all in with BIN was $1000 alone, so there went SD. Soot wasn't readily visible when I was in the house because they had dark heavy curtains and liked low lighting. Once their belongings were out and bright sunlight in, there was soot all over. Upper walls at ceiling, blinds I leave there, carpet cleaning machine water was pitch black. When DH & I removed outlet covers there was a perfect outline in soot. The worst part is the damage to (newer) vinyl window frames and ceramic tile & grout. For some reason (it's porous?) those items just sucked up soot. Despite hours of scrubbing with harsh cleaners, there is still gray residue on some vinyl frames and grout (all were snow white before). Suspect it's in HVAC system as well, I see black dust on white surfaces there when I'm showing it. And that's a brand new costly furnace in there. Never again. I'm banning all candles from here on out, would urge you to do the same, soot cleanup has by far been my worst nightmare.

    10.) Lead Based Paint. If you're renting a pre-1978 house you'll need to have a brochure printed out to give to your tenant and completed Disclaimer attached to lease. Both can be printed out at those links.

    I'm stopping for now. There's probably more but I need to get back to work.

    Oh, and I don't mean to sound jaded or lump all renters into a negative light. Quite the contrary, I've had some wonderful tenants that I really miss & wish I could clone. But you are where I was ten years ago, so maybe my experiences will save you some grief. I was naive, trusting, thought the best of everyone, and was more casual friendly and less businesslike. That's my nature and in this arena it came back to bite me one way or another till I finally changed my ways. Now I'm friendly but firm when I have to be, and never cross that line of not keeping it a business-like relationship. I respect my tenants and take good care of them and in return all I ask is they take care of the place, don't break the law, and pay on time. Occasional jerk aside, it works out well and we have a very good rapport.

  • walkin_yesindeed
    Original Author
    14 years ago
    last modified: 9 years ago

    Hi everyone: thank you for this valuable advice. I appreciate it very much. Moonshadow, THANK YOU for writing all that out for me!

    to clarify a bit: she is a federal prosecutor who's clerked for a federal judge here in town, and has gone through several national- and local-level background checks. She is friends with various family friends, all of whom have very good things to say about her. Her past landlords sing her praises. Fingers crossed, as you never know, but all in all, we are feeling reasonably confident about her.

    We will check on codes and landlord-tenant laws, as well as insurance. Natural stone: our granite is already chipping etc, so that is a good issue to think about. Thanks, Squirrel. I'd have forgotten that.

    The handyman is a longtime family friend -- who of course would call her and check that it's OK before just wandering in. He might pass by the outside of the house when he's in the neighborhood, to make sure our plants are OK. Ditto w/neighbors. No trespassing, no rudeness.

    Keep it coming, if there's anything else I'm missing, and again, heartfelt thanks!

  • deborahnj
    14 years ago
    last modified: 9 years ago

    One other thing, check to see if you have to keep the SD in escrow and provide the information to the tenant. I believe in some states this may be a requirement. Moonshadow, wow, just wow!

  • moonshadow
    14 years ago
    last modified: 9 years ago

    Oh, you are very welcome.

    Your potential tenant sounds like a very qualified one from a financial and 'responsible adult' angle.

    Not to give you the heebee jeebies or anything, but if she's an attorney, make sure you have all your "i"s dotted and "t"s crossed. ;D

    Oh, and deb is correct. I was just checking NJ law today for someone on another forum regarding rentals and indeed, in NJ Sec Deps have to be put in an interest bearing account and a financial report sent to tenants. My state is nowhere near that stringent, so it pays to know your state laws, they really can vary widely.

  • golddust
    14 years ago
    last modified: 9 years ago

    Moonshadow, you are amazing. What a through contribution!

    I know when I used to rent, I would make a list of any little issues the house had. I'd send a copy to the landlord and invite him/her to inspect the house before I moved in. I did this because I didn't want to be blamed when I moved out. Never lost a deposit because of that well filed list. Dated photos are helpful too.

    I've had some great landlords in the past but there have been a few doozies too. I lived in a rental for 5 years. The oven didn't work and it was on my list, along with dates and times I phoned him about this situation. Finally I gave up and purchased my own range. I called him to tell him I was putting his range on my back porch and he should come pick it up. I noted all communication on that list regarding that stupid non-working range oven and thank goodness.

    He never picked up the range so I took it to the dump after a year on my back porch. When I moved he tried to keep my deposit. I mailed him another (updated) copy of my list that included my "journal" of our communication regarding his range. I offered to go to small claims court and let the judge decide if I should get my deposit back. He quickly returned my deposit. Fact was, he never did anything he said he was going to do.

    The only time he returned a phone call was when my hot water heater went out. I responding to his voice message informing callers that he was out of town, explaining I had no hot water and I was going to call in a repairman to fix or replace the hot water heater. He called me when he returned, just to get mad at me for being unwilling to go without hot water for a week and a half.

    I told him he should have contacted me before he left town to let me know who was going to be in charge of his rental while he was gone, but since he didn't, I acted on his behalf. He paid for the repairs, I guess. I never heard from the plumber either way.

  • amysrq
    14 years ago
    last modified: 9 years ago

    Like Deb said....wow, Moon! Just wow! :-) Oh, and we bought a "soot house" and everything you say is true.

    Walkin, when we were part of the live-aboard boating community, the rule of thumb was not to rent out your house unless you were going to be walking distance from it. It was kind of a joke because most of us boaters were way far from home. Most of our friends had good luck. We also let three different sets of friends live in our FL house for three summers running and had very few issues. And DH's ex lived in our summer place one winter while she was renovating. Sounds like your situation is more like ours was....you should be okay.

    Like Moon says, I'd more worried about renting to an atty! :-)

    P.S. Do we get any details on Peru and Germany? Did I miss something already posted? Sounds very exciting!

  • walkin_yesindeed
    Original Author
    14 years ago
    last modified: 9 years ago

    Amysrq, thanks for the good karma... it's actually very exciting, although also slightly terrifying logistically. DH and I both won Fulbrights for the upcoming academic year. So we leave for Peru in August, and then in January we go to Berlin. My poor children are going to be linguistically baffled (well, not too much -- they already speak English and Spanish) but I think it'll be a great year all told.

    And YES about being nervous about renting to a lawyer, esp since NM's rental laws all favor tenants!

  • amysrq
    14 years ago
    last modified: 9 years ago

    Wow! That sounds like an amazing year. It will be great for you, your kids, your family as a whole. Our two years spent sailing really bonded the three of us in a way that just never would have happened living in the burbs.

    (I just told my DH this, btw. Just as an example of the kind of people I "hang out" with here. He is impressed, needless to say.)

    Here in MA, the laws favor tenants as well. This is why we have chosen to tough out the poor RE market and not rent. Your situation is different though. I also imagine that your tenant will be happy and grateful to be living there, as were our "summer guests", and that gives the arrangement an entirely different tone.

    I suggest you try to keep a journal of some kind. I blogged from the boat, before the word blog even existed! Had about 60 people on a mailing list reading updates every day/week/whatever. In many ways, it was good to document the journey.

  • walkin_yesindeed
    Original Author
    14 years ago
    last modified: 9 years ago

    Amy, that's great advice -- I will definitely keep a journal, and will encourage my sons to as well. (DS2 is only 5, so that might be a lot for him, but he can draw, and I can write for him...)

    Your boat year sounds great as well! I feel very grateful for this opportunity, and am really looking forward to stepping out of my usual way of doing things for a while.

    Thanks for the good words!

  • amysrq
    14 years ago
    last modified: 9 years ago

    Indeed, Walkin. I'm sure you'll make the most of it.

  • graywings123
    14 years ago
    last modified: 9 years ago

    I didn't know we had a Fulbright scholar among us. Very cool!

  • moonshadow
    14 years ago
    last modified: 9 years ago

    Walkin, I just sent you several blank forms. I hope you get them, my PC is giving me fits. Any issues with receipt, let me know!