<p>I would think Mormon missionaries would be perfect tenants…no drinking, no smoking.</p>
<p>$150,000,000 credit line … lol. That should cover a lot of rent.</p>
<p>The last response was the prospective tenant was going to provide additional information but we haven’t heard anything yet. There was one more showing this late afternoon so maybe someone else may come along. </p>
<p>In the additional information came through and it is pretty solid I think we will take a chance unless someone else very solid turn up in the next two days before we said we will give her an answer. </p>
<p>We have decided against the 960 credit score person as he offered a one year lease and wants to move in the middle of the month, meaning he wants us to absorb half a month of rental loss. </p>
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<p>Thank you. We usually don’t ask for this much information, usually we ask for credit report, proof of income/employment and previous landlord references if any. We are asking more about this applicant because of her situation, which we haven’t came across before. I used to live in that neighborhood and she lived in a house only a few streets away so I almost feel as if I am dealing with a neighbor. We could have been friends. Sigh. I suppose with any other landlord she would face the same level of scrutiny. </p>
<p>The rental income reported were from real estate in Florida and Texas. They were verified by tax return and by bank deposits. The rent to reported income ration was way less than 40%, however she reported a mortgage of about $3000, which is a significant and fixed sum every month against her income. Adding the $3000 mortgage and our rent will increase the ratio to well over 60%. Then some comment about how the trust fund “takes care of the children’s education” somehow makes us wonder if the children attends private school, since the oldest is 16 and the youngest is about 6. If true, that is another significant source of expense. When I asked our agent she could not provide us with anymore information about this issue. She said the other agent said with the trust fund they can well afford that rent. </p>
<p>The house is about 25 years old and no lead paint issues. Thank goodness.</p>
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And no playing loud music, no watching TV (they don’t even have a TV), no having parties, they get up early, go to bed early, work really hard, don’t bother the neighbors, and are pretty much the politest tenants we have ever had. I’d rent everything I have to them if I could.</p>
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Is she trying to sell the house?</p>
<p>“when I bought the house from the bank two weeks ago, there are 4 unrelated ppl in the house. The smart son of the previous owner figured out he can make money by renting it to 3 more ppl. I have headaches ever since. In CA, you have to offer a lease to them first and then evict them. So I have signed a cash for key agreement with them, it is a real PITA.”</p>
<p>Hmm, how does that work? We are in the midst of buying 3 short sales right now. One condo is empty, one has tenants, and the other has the owner living there. The one with the owner, the bank sent something saying that he MUST vacate by one day before closing, and we are not allowed to rent to him. Not that I’d want to, the POS hasn’t been making his loan payment for the last year, though he is gainfully employed. Sure wouldn’t want anyone like that, no wonder the bank is thrilled to get rid of him though they’re selling it to us for 1/3 of the mortgage he owes.</p>
<p>But in your case, the bank sold it to you with people still in it? Shouldn’t they have forced them to leave before you closed? Why should you have to offer anything to them, they are there illegally, are they not?</p>
<p>In most states, tenants have some amount of legal protection. Once they are in there, you can’t just show up with some muscle and forcibly eject them, even if they are deadbeats, as satisfying as that would be.</p>
<p>You have to evict them, and this can can a time-consuming, expensive process. And if the tenant knows how to work the system they can drag it on for months. </p>
<p>It is almost always cheaper and quicker to pay them to leave, and you have a much higher chance of then tenant not doing serious damage on their way out the door.</p>
<p>Yes, in foreclosure and foreclosed sales, all forms of tenancy are possible. When the banks sell you with squatters, the price is going to be much cheaper than without. My job right now is to evict squatters, some times it’s worth hundreds thousands.</p>
<p>Short sale is a different issue. In it, the seller does gain some thing, namely a shorter period of lowered credit rating. I think you Can regain your credit rating in two years in A short sale instead of seven in foreclosure. Thus the bank will demand more of the seller. Besides, in a short sale the seller is still the owner, not the bank.</p>
<p>notrichenough : I have no idea if the applicant is trying to sell the house. We received a letter from a private trust stating that they (??) are going to pay the rent. I don’t think that is worth much in terms of assurance. </p>
<p>The agents suggested she speak to her directly and the H is willing to do so. I know we have a few trust fund people living in the neighborhood but it is difficult to figure her financial situation out, I mean her ability to pay rent. </p>
<p>We will give her a last chance, and meantime there is someone else with a solid job and a 840+ credit score who put in an application. They only wanted to rent for a year and we prefer a two year lease.</p>
<p>I just told the H that it almost feels as if we are jumping through hoops for a 580, getting out of our comfort zone and turning away the 840 and 960, all because we wanted a two year lease. </p>
<p>On an aside, both applicants from out of town are from New Jersey and home owners - a good sign perhaps about our local economy… I hope anyway. I want to sell this house eventually, sooner rather than later.</p>
<p>Rent to a 850 for a year would be my preference. A lot of people will renew the lease. Its better to rent a good tenant than a debt beat.</p>
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<p>Is there a particular reason you only want to get a 2-year lease?</p>
<p>hops_scout - I thought all landlords love long term tenants, lol. We have one rental where the currents tenants are on their third year, they renewed after two years for a further two year term and mentioned they would love to stay on for indefinite term… For that we put up with one (unmentioned in application cat), one recently adopted kitten (which the neighbor complained about) and one small “weekend” dog. The carpet were new when they moved in, btw and so was the cherry hardwood floor. We are prepared to do some major renovations after they leave, hopefully after another 5 years or so. We lose one month’s rent for leasing fees every time we have a new tenant, and professional cleaning and either 1/2 month to 2 months worth of maintenance for new paint etc. </p>
<p>artloversplus : We asked about a 2 year, the 850 adamantly said no. They just sold their home in NJ, so I suspect their plan is to buy a house in the neighborhood. They can afford it. I keep hoping for a transferee from Japan with a 5 year contract… but no such luck. Their company, usually a large one, guarantees their rent and somehow these people keep the cleanest and loveliest homes. I suffer shame and house envy every time I visit one of them. </p>
<p>I just talked to the H, it is just not good sense to rent to the 580, though we are sympathetic to her and feel a certain affinity for the fact she had lived in the neighborhood in the last 10 years.</p>
<p>I had tried renting an apartment (in college) from a landlord who did a lot of short-term leases. He actually did not like even year-long leases because he said then all of those would end at the same time. This way, with people moving in and out all the time, he and his staff could do maintenance work on a more revolving basis and not lose as much. He also owned something like 300 apartments…</p>
<p>As a potential renter, I would hate to sign a 2-year lease. If I lose my job and have a 2-year lease I’m pretty stuck, huh? </p>
<p>Anyway, I was just wondering if there was a particular reason you were adamant about getting a 2-year lease…</p>
<p>^We prefer long term leases but we are not adamant, for the reasons we gave. </p>
<p>We are absentee landlords who uses real estate agents to lease and a property manager to look after our houses so our expenses are high unlike your previous landlord who apparently managed his own property. </p>
<p>This rental has a good school system and attracts people with kids who want great schools. From our experience it is rather expensive to move for families, easily one or two month’s rent out of pocket plus the time packing. So, they tend to be more long term tenants and when they move, they usually move into a house they bought. That had been our past experience with the previous tenants. </p>
<p>The other rental I mentioned with the cats - its location is very convenient and the tenants use this as their second home or pied-</p>
<p>munchkin, you are assuming people are as honest and honorable as you are. They aren’t. They lie, and will sign any lease to get the property. Then move out when they want, not intending to fulfill the contract. I’d go with the higher credit rating people, because at least they have something to lose and will probably fulfill the contract they have, or pay until you get a new renter…should they break the lease.</p>
<p>I don’t know any landlords who try to get two year leases. We typically do a 1 year lease and then switch to tenant at will.</p>
<p>In my experience, having a lease provides very little protection should the tenant decide to break it. You can sue them but you are required to make a significant effort to re-rent the unit to mitigate the damages. And if they are moving a significant distance or out of state, you are just wasting your time.</p>
<p>There’s no way for small landlords to report to credit agencies if a lease is broken, so they don’t even have to worry about. Really about all you can do is give them a bad reference if they are dumb enough to use you as one.</p>
<p>It’s one reason we collect first, last, and security. Our lease says that if they break they lease the tenant is responsible for paying any commission to re-rent, and we can take that out of the security deposit.</p>
<p>We don’t paint every time a tenant moves out, and only professionally clean if the previous tenant left it dirty. And a large percentage of time, we have someone new moving in the day after someone moves out. So our downtime is as small as possible.</p>
<p>On commissions - lately we’ve only been paying 1/2 month for the units that are easier to rent. If the agent wants more, they collect it from the tenant.</p>
<p>I agree with NRE. In addition, I may add:</p>
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<p>This should have been factored in your purchase price already. Out of state ownership does cost more.</p>
<p>I know of no people doing more than 1 yr lease for residential property. No law against it I’m sure, but it certainly could limit the better prospects, as we see in this thread.
A written lease is a promise, theoretically enforceable in court. When tenants break mine, and we cannot find a compromise, then I take them to court. In our state, a tenant that breaks lease is responsible for all costs a LL can document that he incurred because of that breach. No need to separately list ad in newspaper, commission cost, etc.
In our community, a judgment against a tenant is published in the local paper, and our court sends it directly to the credit bureaus. That is some degree of leverage, since it does affect their credit and could affect employment. But heck, if a tenant wants to break a lease he will, and he’ll risk any possible consequences.</p>
<p>Certainly any prospective LL that buys a property out of state would know that when he makes an offer; and certainly his extra costs must be factored into his rental price. But some absentee LL are that way because of circumstance- not because they specifically chose to buy an out of state home as a rental. That would be way risky, and far too risky for my taste.</p>
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<p>This is a great idea. I’m going to use that in any future leases.</p>
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<p>I totally agree with this. We do the same thing – a one year lease at the start and then let it revert to month-to-month. Leases protect the tenant more than the landlord because of the time and expense and difficulty of evicting, collecting a judgement, etc.</p>
<p>Interesting to hear about other’s perspective regarding long term (more than 1 year) tenants. I understand the difficulty of enforcing rental contracts in case things do not go as expected. To me, a two year term signals intent, more than anything else. It really does not matter if the contract is one year or two year or 5 years. We just had one tenant, two months after moving in, informed us she lost her job and was going to move out. We just agree and rented it out to someone else. We did charge her advertising (actually CL is free) and other expenses (our time and gas for showings) which came to half a month of rent (because we manage this property ourselves). We could have charged her a whole month as provided for in the contract. </p>
<p>We normally build a rental increase into multi-year contracts. In the case of moving out before the lease ends the tenant is liable for expenses involved in renting the house out again, which is normally one month’s rent. </p>
<p>We finally picked the applicant with the 850 score, a company transferee. I thought they were from NJ but turns out they had a house in NJ, which they just sold but am moving from Tennessee. </p>
<p>My H called the lady with the lower credit score in the evening as he told the agent he would to try to understand better the trust which supports her. However she was not in and he left a vm. There was no call back that evening and next morning, just before we were to head out for our return drive home, (we were in Ohio on a business trip) our agent called and told us the 850ers just offered a two year term and if we would accept them.
We thought about it for a minute and agreed that these people seemed like a better choice . We felt bad for the other lady but in the end, her situation was just too much outside our experience for us to figure out. </p>
<p>We quickly drafted an email of intent to accept for our agent. The applicant said they will be at the house on Tuesday and (from our agent’s email) the prospective tenants "would like to view the house and point out the things that need to be fixed to me. "</p>
<p>I don’t know why, but I find that a little off-putting. As landlords we fix all things and have the house professionally cleaned, including carpets before a new tenant move in as a matter of course for that house. Now we are wondering, because these people first came up with 9% less of what we were asking for, we said no, and then they met the price, then they met us on the term that they feel they are paying too much and now want “their money’s worth”. Oh well, we will deal with things one step at a time. </p>
<p>We are the lowest rent out in that school district, the only other rental available is 35% larger and about 45% more.</p>
<p>"The applicant said they will be at the house on Tuesday and (from our agent’s email) the prospective tenants "would like to view the house and point out the things that need to be fixed to me. "</p>
<p>I don’t know why, but I find that a little off-putting. As landlords we fix all things and have the house professionally cleaned, including carpets before a new tenant move in as a matter of course for that house"</p>
<p>I know that is irritating, especially since you think they are getting a pretty good deal for their money, and you had a choice of tenants. But…here is what I’m finding out. Good tenants (people that pay the rent on time and keep the house in good shape) think pretty highly of themselves, and they are going to expect you to come in and fix every little thing. They seem completely incapable of fixing anything themselves, except for maybe changing a light bulb. It is much more annoying, costly, and difficult to fix these things after they move in. You are going to have to schedule repairs, one thing at a time as they discover them. So much easier to have whatever they need fixed done right away, all at the same time.</p>
<p>Here was our experience with our current rental condo. My husband met with the tenant to, what he thought, was to sign the paperwork and give them the keys. The tenant and his father in law spent 1 1/2 hours crawling around the condo, finding every little last thing…stuff we never would have thought of, and handed him a list of 15 items to repair. My husband was really irritated, as we had thought the condo was in perfect condition. Apparently not! But he spent a couple of days fixing everything (while people were in the rooms, watching him do it…how awful when you’re not a professional).</p>
<p>Next renters come in, great people, always pay, very nice. But a couple minor things come up (they they could have figured out themselves), and now he needs to fix them immediately. One, we had to call a locksmith for…could have fixed it himself easily, if they (or we) had discovered the problem earlier. A dishwasher problem, my husband tries to fix it, and the adorable little toddler is always in there, talking to him and being a distraction. A minor door lock issue. All things that he could have dealt with in his own time, when he wanted to, with no audience or scheduling appointments. Leaving us thinking, for our next condos, we are going to every single room and fix every single thing possible, test it out, make it foolproof, so people aren’t calling us all the time when we are thousands of miles away, or it is late at night!! I really recommend you just forget the irritation of it, accept it, fix everything and maybe they won’t bug you and might even try to handle some of the things they didn’t discover in their inspection. At least it does sound like they intend to be there for a long time.</p>