Queer Eye for the Real Estate Guy
From Tom Nardone, “Millionaire Mailman”
It happens every now and then, but when it happens, the result is always the same…
I just got one of my rentals back from a gay couple I was renting to. I went over to the house after they left and I knew what to expect…
As I opened up the front door and looked inside, I let out a “Hallelujah, YES!"
Clean up, clean up, everybody do your share
Every time I rent to gay people, I get the house back so immaculately clean, that it’s ready to show and rent with little to no "punch-out list."
My experience with gay people is they are usually "neat" and "tidy." Two male income earners to the household usually assures the rent gets paid on time.
For those of you students who may be new to landlording, a "punch-out" is when you have to go in and paint, carpet, mulch, plant sod, scrub, change counter tops, throw away appliances, haul pets off to the pound, scrub the white body trace lines off the floor, etc., etc. (You thought I was kidding on the last two? I’m NOT!)
Occasionally we actually have to "punch out" the tenant, but I bring the sheriff along with me for those situations.
Find good houses, find good tenants
All humor aside, sometimes, I get houses back in less than desirable condition, but for the most part, having good tenants, starts with buying the right house in the right neighborhood.
Run down dumpy houses attract run down dumpy tenants. A good tenant simply just wants a house that they can have some pride of ownership in (even though they don’t own it) and a landlord that will have repairs made in a timely manner.
So when picking a house to keep as a rental, be sure it’s in an area of town that people want to live in.
Play by the rules
Regardless of who you rent to, let me give you a couple of never break rules and “must do” tips:
#1 – Never let a tenant have a key to occupy the property unless you have a signed agreement to rent the premises.
#2 – Never give a tenant the key unless you have the 1st month’s rent and a deposit equal to at least 2 month’s rent IN CASH (cashier’s check or PayPal will do), but it has to be the equivalent of cash.
#3 – The more the security deposit you get up front, the cleaner you will get the house back.
#4 – When reviewing a prospective tenant’s application for rental, it’s useless to talk to the tenant’s CURRENT landlord to ask for their opinion about your prospective tenant. Most current landlords looking to get rid of a bad tenant will tell you anything you want to hear!
Therefore, it’s critical that on your rental application you ask for the name and phone number of the previous landlord. That landlord will certainly tell you the truth about that prospective tenant.
#5 – Whenever possible try to take a ride by the house the tenant is leaving. If they are standing at the front door when you go by, ask if you can come in. You will see what your house will look like in a year.
#6 – Take a glance and look in their car through the glass. How people keep their cars is usually a sign of how they will keep their house.
#7 – Beware of people who come with all cash, but have to start their tenancy THAT SAME DAY!
My example of why you should never break those rules
I sat down with a potential tenant last month who tried to put the rush on me. I always meet the tenant to sign the contract at a public place like a McDonald's. They filled out the application at 9:00 am and wanted to be in the property that night. They said on the application they had never been evicted from a tenancy…
They were shocked when I logged on to the County Civil Court Records website with my laptop while sitting with them at the McDonald's and showed them they have a CURRENT eviction in process where they are living now.
It’s obvious they were on the run for some reason. When I confronted them about it, they had mixed stories; they knew I caught them in their lie. They slid the $4,000 in cash toward me across the table (and through the dried ketchup), but I pushed the money back to them.
I closed my laptop, got up and left before we signed anything.
Get to know the websites you need to know to look up court records and ownership records so you can check people out in a hurry.
Yes, it was hard to NOT take their money. I really wanted to rent the house. But waiting for the right tenant when you have a bad feeling is a smart thing. Sure enough, I rented the house 3 days later to a nice family that will probably stay there for years.
Work out the payment over time for a portion of the rent instead
I know when the economy gets tight you sometimes have to bend on the deposit amount to stay full…
But, if you work out an agreement to pay a deposit over time, for say the first 6 months, that’s a NO, NO.
In many states you cannot evict for non-payment of a security deposit, but you CAN evict for NON-payment of the rent.
Always remember, you can choose NOT to rent to a tenant because they do not make enough income, or they have a prior history of tenant eviction, or you find out that they lied on their rental application once you do a background check. However, you cannot deny their tenancy because of race, religion, sexual preference or gender.
So if you have rental properties, that’s your real estate tip for this month! Make sure you check out my other posts, like this great one.
Enjoy the Journey!