The truth about becoming a landlord
Make sure you get management help and understand the financial implications of taking on renters.
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When Sarah Uzzin bought a two-family home in Howard Beach for $450,000 four years ago, she decided to rent out the top floor to help pay the $2,000 monthly mortgage. (Bing: Are mortgage rates still falling?)
Some 39 percent of prospective homebuyers nationwide plan to become first time landlords, according to Redfin, but many like Uzzin find this seemingly positive arrangement to be a Pandora's box.
The 28-year-old found a married couple to pay $1,200 a month. For three years Uzzin's tenants paid on time, but just this year, the couple flaked altogether. "The wife wore very expensive clothes, carried a designer purse and her nails were always done," Uzzin told MainStreet. "She was a working professional but now their checks are bouncing."
Uzzin has filed a $4,200 lawsuit in small claims court and is paying an attorney $1,300 to help evict them.
"Before you rent to a tenant, do some investigation because not everyone tells you the truth," Uzzin said. "Bringing someone inside is easy but evicting them is very hard."
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For now, Uzzin says her nightmare tenants are living in her home rent free and trying to claim disability to continue to evade eviction.
"When I see them, they threaten me since I am a single woman," Uzzin said. "They scratched my car, and when I try to collect the rent, the wife yells and cries."
One of their biggest mistakes landlords make is attempting to manage properties without help.
"Owning and managing real estate is more complex than some might think," said Dylan Pichulik, CEO of XL Real Property Management, a property-management firm in New York. "Engaging a property manager can provide protection and save money."
Dylan advises prequalifying tenants to avoid deadbeat renters.
"We pay attention to income and credit score, because if a potential tenant has a history of late payments, it's an immediate red flag," Pichulik told MainStreet. "The eviction process is very messy and we want to do everything we can do to avoid it."
Landlords can prosper by buying rental properties in cities where tenants are a dime a dozen so that when one renter moves out there's another one coming.
The top city for renters on the move is New Orleans, according to a Rent.com/FlateRateMoving study.
The rental vacancy rate is 15.9 percent, and a one-bedroom unit goes for an average of $735 a month
"New Orleans' low cost of living, vibrant culture and laissez-faire lifestyle make it an ideal place for renters to move," said Niccole Schreck, consumer insights and marketing manager with Rent.com. "The city also is home to two major universities, which brings a fresh, young vibe."
In second place is Austin, Texas.
"Austin's low unemployment rate and influx of tech jobs make this Southwest city a sweet spot for job seekers," Schreck told MainStreet.
Austin's rental vacancy rate is 9.6 percent and one-bedrooms rent for an average of $1,269, compared to Atlanta's 10.6 percent and $1,410 to rent a one-bedroom.
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An owner's dream is to find the set of tenants who will stay long and that will take care of the property.
It is a difficult dream to make happen, but it is possible.
It is the same on the side of the tenants, if they see the owner making all he or she can to make the place comfortable, the tenants will stay and be good paying their rents.
So it is like a river that flows both ways.
However, dealing with people usually involves having to deal with people's problems, and it may come down to how much patience and understanding you can put together..
Speaking from a renters perspective: Ive been a renter for 11 years now and have never been late paying rent once. Ive always done routine maintenence and inexpensive repairs myself. I like to move around a lot so usually every 1-2 years I move, ( i dont own much of anything so its easy) . For me, rent payment comes first. I view it as my home and I would never expect to live there for free, at my landlords expense...that is just stealing in my opinion.
Heres a tip for honest renters: Get a few good references and landlords will usually negotiate. I've been able to get reduced monthly rent a few times, some furnishings provided by landlord..etc. If you are a great Tennant, landlords can tell quickly. They will work with you and want you to stay because good Tennants are hard to replace. Freeloading Tennants are a dime a dozen.
It really comes down to the people you're renting from. There are some bad apples, but definitely some good ones as well. I lucked out with mine.
Only exception - places where the property is so cheap to buy and fix up that you can get your money back in 1 or 2 years - or you can sell it outright (aka flip).
Best advice I can give is know the legal process yourself. Lawyers are slow at evicting tenants and ineffective for the most part at collecting lost rent.
The comment from "Shake Wake" on the surface sounds like good business, it's not an acceptable professional solution. Most likely this person is a renter. If you run any type of back ground search on a renter applicant you will love those property owners/managers who "evict" a dead beat tenant. Because the eviction will more than likely show up on their back ground search. There are professional dead beat renters who use this and other tools to rip off landlords. The eviction process will really limit these dead beat renters ability to rip off others not to mention put an end to one of their income sources. You have a tenant that is "working you" (taking your money) evict them.
The landlord has to start an eviction process as soon as she or he notices the tenants being late with their rent. They have to be given notices to pay or to vacate. Over at this end, tenants are given a 3-day notice, then a 7-day notice. After those 10 days, landlord files a writ and restitution suit against the tenants. The court then issues a summons for the tenants to appear about a week after that. Usually, they are evicted as expected..
I do not think it has anything to do with being red or blue