MRLANDLORD.COM MONTHLY TIPS ON MANAGEMENT

RESIDENT SELECTION CRITERIA  There are statistics that say as high as 95% of the problems that landlords have with rental property are the result of the residents we select. Whether that figure is that high or not, it is clear that choosing the right residents is one of the most important things we do as rental owners and managers. Recently on the MrLandlord.com Q&A forum, a landlord asked “I keep hearing about landlords needing written criteria for their tenants…. please help me add to my criteria.” One sample set of criteria shared by an experienced landlord is listed below: Resident Selection Criteria We will accept as a tenant any person who submits an accurate, complete application for an available home; meets the standards set forth below; and agrees to abide by the rules and regulations set forth by Management. We support the Fair Housing Act as amended, prohibiting discrimination in housing based on race, color, national origin, religion, sex, handicap, age or familial status. Every person 18 years & older must submit an application. Income Requirements: The monthly rental rate can not exceed 1/3 of the resident’s monthly household total disposable income. Applicants must prove income via current pay stubs from a local company or equivalent for 1 year. The income verified must be stable and not be temporary or seasonal work. Unverified income for the past year causes the deposit to increase to triple deposit. Credit History Requirements: A CREDIT REPORT is requested from the CREDIT BUREAU. *Applicants with any unpaid collections if accepted, deposit will be increased $150, or up to the amount of the collections. *Applicants with a limited recent history of late payments, but current to date, if accepted, deposit may be increased $150 extra. Rental History Requirements: Applicants must indicate name, address, and telephone number of current and previous landlords for 2 years. We will verify current & previous rental history. Applicants with negative rental history may not be accepted. Examples of negative history include but are not limited to evictions, default of lease, non-payment of rent, or damages to home or apartment. If negative rental history is accepted, deposits will be double. Applicants with no rental history, deposit will double, and must meet the income and credit history requirements. Criminal History Requirements: * Criminal convictions that involve moral turpitude, integrity or honesty will not be accepted. * Criminal convictions that involve physical violence or endangering the health or safety of another person will not be accepted. * Criminal convictions in connection with the manufacture or distribution of a controlled substance will not be accepted. * Applicants with recent multiple misdemeanors will not be accepted. Pet Policy: Up to 1 pet or animal may be accepted of many types and 1 is the maximum. There is a weight limit of 20 lbs for the pet/animal. No pet/animal that may be expected to grow over 20 lbs will be accepted. No vicious, unruly, difficult or dangerous pets/animals allowed. A 20 gallon tank is maximum size and counts as one pet/animal as long as all pets/animals live inside, always. All pets/animals must be always friendly to strangers. A pet/animal registration fee of $150 per pet/animal will be charged for the pet/animal and the monthly pet/animal rent is $25 extra for the pet/animal. All pets/animals must have complete local Veterinarian file provided to Landlord prior to move-in. Seeing-eye dogs are permitted with written physician’s statement at no additional cost. No pets are allowed except with the written permission of Management. No visiting pets/animals allowed at any time. FACEBOOK INSPECTIONS Did you know that Facebook can help you screen prospective residents and CURRENT residents? One big benefit that one landlord has discovered, was that Facebook can be used to check his rentals from time to time by having his spouse pull up tenants’ Facebook pages. Very often, tenants post pictures that are taken inside the units. Works very well to see the condition of the unit without going inside.

HOW DOES MERCY AND CHARITY COME INTO PLAY IN THE RENTAL BUSINESS? “What is the ‘correct’ course of action when confronted with tenants who are chronically late or non-payers? I have responded in my usual way–no pay, no stay. I thought it would be useful to also talk about when and how we as landlords approach the topics of Mercy, Charity and Business. I do not tolerate late payers. The many reasons given are immaterial. Divorce, job loss, disorganized, deadbeat, medical bills, death in the family, long-term tenant is a little short this month… I DON’T CARE. Actually, I DO care…I’m not heartless, but neither am I a fool. I realize that “life happens” to people all the time. The difference to me is how does the person react. Do they approach it as a challenge they can help overcome, or do they throw up their hands in despair and expect someone else to take over and fix their problem? We could probably argue all day about doing the moral thing vs. the business thing, but I believe that the business thing IS the moral thing to do. The business relationship–while not perfect–is the best we’ve got. When people follow the agreements they make, we reach the optimal outcome for the most people. I am willing to alter agreements when it is reasonable to do so and we both come up with something agreeable. What I am NOT willing to do is allow tenants to unilaterally decide to stop paying me rent while they remain in my houses. I have allowed folks to move out, in a few occasional forgiving around 50% of what they owed, because of the way they handled the decision, notified me, and were prompt in following the altered agreement we reached. This is an act of Mercy on my part, and it is understood that I don’t owe it to anyone. I choose to do is because I know it will be best for all involved. When a tenant tries to force me into being a charity to them, that’s when all heck breaks loose and I go into full-on “kick ’em out” mode. There is a sharp difference in attitude between someone requesting an act of mercy vs. someone copping an attitude, being passive-aggressive and stealing from me. We as landlords get what we tolerate. Anyone who allows tenants to run the show sets up a false expectation in the tenants’ mind of what the next landlord will do and what he should tolerate. This is bad for the industry and bad for the tenant who might get a no-nonsense landlord next time. I am not strict. But I do draw the line at the lease. If you can’t pay: move out. If you don’t move out after 7 days of picking my pocket, I evict you. Period. If you don’t plan on living up to this agreement, then don’t live in my house. Go live with a friend, a relative, or apply for Government housing.”

HOW TO GET YOUR RENT, EVEN IF RESIDENTS CAN’T PAY! If residents cannot pay, I point them to resources, if they don’t feel their situation is legitimate enough to ask for help, that means they are spending their money elsewhere and it’s not a legitimate need such as temporary job loss. I usually send them a list of resources they can reach out to like Salvation Army, churches etc. One tenant recently had a severe burn and has not been working for the last month and I gave him this list, he was able to get assistance for 2 months of rent from Salvation Army. They do not pay his late fees, so I will still apply his rent to late fees first when his rent payment in August from him (not Salavation Army) is due… This was a legitimate need in that case and it was great that he was able to get the assistance needed. This only helps if they contact you ahead of being late otherwise this delays things quite far out while waiting for their approvals etc. He was still late and I still sent him all of the notices for eviction if he does not pay etc so that in the event he is not approved we don’t delay the eviction process further (if his case was not legitimate). You can find and create your own list of resources (for your own local area) that a late tenant can contact by searching agencies on the following website –needhelppayingbills.com.