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Be a Fair Landlord, But a Firm Landlord

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It’s important to be a fair landlord with your tenants, but many times this opens the door for a tenant to take advantage of a landlord who is too nice, so you also need to know when to be a firm landlord at times!

A firm landlord know when to draw a lineI was reminded of this last night as I was on a consulting call with a very nice landlord who was being too nice!

Now I’m not saying it’s a bad thing to be nice, you just need to know that there are people who will take advantage of this niceness, so you need to know when and where to draw the line in the sand and be a firm landlord. And trust me, it’s not restricted to just landlording, there are people who will simply try to take advantage of you anywhere!!

If you find yourself often on the short end of dealing with tenants because you are a nice person, here’s a quick tip to turn you into a firm landlord without confrontation.

Don’t let the tenants know you’re the owner!

Yep, only let them know you are the property manager (which is true, you just manage it for yourself).

Now if the tenants try to take advantage of a situation you can simply reply, “Oh, I’m sorry I can’t make that decision, I’ll have to check with the owner”.

This gives you time to make a better decision rather than being pressured into a bad decision on the spot.

And yes, you can use this even if they know you are the owner, just change it to something like “I’m not sure if that will work, let me look into it and get back to you. Again buying you time to make a smart decision rather than a situation where you are taken advantage of.

What are your thoughts, are you a fair landlord? Or a firm landlord? Do tenants take advantage of you being to nice? Leave me a comment below as I’d like to hear your thoughts and whether you think this could help you!

 

So, Your Tenants Late with Rent…

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Dealing With Late Paying Tenants

late rent payments - tenants late with rent

I received an email recently asking me what steps a landlord should take when a tenants late with rent and I was kind of taken aback.

You see, this is one of those issues that is so easy once you’ve gone through it a couple hundred times. The problem for me is it was so long ago, I’d forgotten what I do is a learned response.

And I learned it so long ago that when a tenants late with rent, I simply take action.

So, rather than making you learn it on your own, I’ll just go ahead and break down the steps you need to follow if this occurs to you, but before I get there,  I want to talk about the challenges of evicting a tenant.

It’s these challenges that create the need for your actions to follow a specific process on your end as a landlord, so let’s dive in.

The Challenge of Evicting a Tenant

Just about every jurisdiction has a specific process for evicting tenants. Sometimes it involves a three day notice to quit, other times a 14 day notice to vacate. Some places require a court application to make it official and others have tribunals.

The one consistent challenge this represents for landlords is you need to prove your tenant has breached your lease and/or that you have a valid reason to evict them.

In my experience those valid reasons for an eviction tend to revolve around three main issues,

  • Non-payment of rent
  • Damage to the property
  • Conflicts with other tenants

You would think any of these would be easy enough to prove, but when you end up in a hearing, landlords often find themselves ill prepared compared to the excuses or lies that a nefarious tenant may be able to come up with when faced with eviction.

I’ve had tenants late with rent lie about paying cash and not receiving receipts, I’ve had tenants try to explain the gaping hole in the drywall was there when they moved in and I’ve had tenants explain they had no idea there were conflicts.

So what’s a landlord to do? Especially when a tenant is outright lying?

Preparing For Evictions Before They Are Necessary

Now, the point of this article is about what to do when a tenant’s late with rent. It could just as easily apply to damage to your property being damaged, conflicts between tenants or any other reasons that could lead to requiring an eviction of a tenant.

The important sub message for you is that every issue like this you need to understand could be the first step to building up a case for eviction. Assume the worst, and hope for the best!

That’s why the first step you need to take is to create paper trails you can refer back to if the situation doesn’t correct itself and goes further out of control.

When I’m consulting with landlords about evicting tenants I continually harp on documenting everything. It’s not just a matter of talking with them, you need to document it as well.

That’s part one of preparing, but just because you’ve documented it doesn’t end there.

Part two is making sure the tenant receives copies of your notices/documentation so you have a complete paper trail and takes the ability away from them to say they weren’t aware.

Creating a Complete Paper Trail

Tenants late with rent so create a papertrailSo what is a complete paper trail? It’s evidence that shows everything along the way, whether it’s the written notice you provide informing tenants rent is late, to complete documentation showing the condition of the property when they moved in all the way to dates and instances of previous conflict issues with the tenants.

Hopefully this is making sense, but to clarify even more let’s walk through an example.

It’s the 1st of the month and Joe your tenants late with rent. Now maybe he usually sends electronic transfers later on the 1st, so you sit back and eagerly check your email on the 2nd, again no money!

Tenants Late With Rent

Step 1

I’d suggest calling and/or texting the tenant immediately advising them they haven’t paid rent for the current month yet.
It could have been an honest mistake, or it could be a sign of pending trouble. You can often tell by how easy it is to initially contact them. Although sometimes you may simply get strung along as well if you do reach them first time, so be diligent and stay on top of this.

If you get paid great, you still want to move onto step 2, but at least the pressure is off.

Step 2

If you were paid, great, but you’re not done yet.

Follow up with a written letter for the tenant informing them that you understand late payments can happen, but this can only be a one off type situation as the rent payment is required to cover your bills for the property like a mortgage (you may need to ad-lib here a bit depending on your situation).

If you weren’t paid, you want to create a more stern letter for the tenant explaining all of this.

In both cases you need to refer to the conversation and/or text correspondence that you previously had about this issue. This is a matter of building up your evidence and paper trail.

I’d suggest bringing up potential repercussions if it’s not dealt with immediately and what may happen if the situation isn’t corrected (eviction, extra costs to the tenant and more, but all without being threatening, just informative).

Step 3

***UPDATE – Thanks to some great feedback from one of our readers, who also happens to be a Constable located in Massachusetts, he’s recommended the following tips regarding service of paperwork;

1) Certified mail does not need to be accepted and won’t be returned immediately. First class mail cannot be proven to have been delivered. Worse still is there is no proof what was delivered.  Tenants can claim that they received an empty envelope or one containing a blank piece of paper.

2) Proof of service.  I am an officer of the court. As such my return of service is accepted by the court as prima facie evidence that service was effectuated as indicated. Also I am a disinterested person and have no involvement in the action.

I would strongly suggest that whenever possible a Constable, deputy sheriff or Marshall should be engaged to serve this process, ensuring  that the case  can move forward with little delay. – Constable MP Weisberg

Now rules and variations do occur depending on where you are located, so make sure you understand them locally. Service by a process server, Constable or Sheriff may be mandatory, or simply advisable depending on your unique circumstance. Thanks for adding your voice to this MP and thanks for helping other landlords!

It’s important that you hand deliver this if possible. If it’s not, you want to create some potential trail of delivery and receipt.

If you’re hand delivering make note of the date and time and follow up with a text and/or email referring to the letter you dropped off. A frequent tenant response in hearing is they never received any notice about the problem, this solves that.

If you are not able to hand deliver you can send it via registered mail or courier which provides a tracking process.

If neither of these are possible as the tenant is trying to avoid you, then your option may be posting the notice on the property.

The challenge with this is it’s still hard to prove they received it, so here’s some additional steps.

Make sure you post it on every entrance to their unit. If it’s an apartment, it’s easy, just post it across the door and the door frame so they can’t miss it as they go in or out.

If it’s a house with a front and back door, post a copy on the front and back door, again across the frame and door. If it’s a house with a garage, post it on the two doors and the garage door.

Perhaps most importantly whatever the circumstance, once it’s posted then make sure you take a photo with some sort of date and time stamp to verify when you took the picture(s), just in case you need to prove it later.

Just as a warning, be aware some pro-tenant jurisdictions may claim this is tenant harassment or potentially slanderous if it’s posted for everyone to see. Always be aware of local rules and laws and make sure you can back up any claims that may be indicated to protect yourself.

Step 4

Follow up!

Once you’ve talked to the tenant, left them notice or documentation about the issue, follow up with an additional text, email or follow up phone call which you also document.

I’ve run into numerous situations where tenants have confirmed via text they received the notice, then in a hearing deny it and their entire claims fall apart due to the text evidence showing they are lying.

The final proof ends up often being your follow up, so don’t take a short cut and miss that final step as often it can be the deciding factor.

Final Thoughts

One way to stand out if you do ever end up in an eviction situation is to be a professional. If your tenants late with rent it requires more than a phone call or text to be a professional. You need to do the extra work!

As is often the case it comes down to treating this like a business and doing your job professionally. If you’re in a hearing and you come across as a professional who has all the evidence, is following all the rules and are going through all the proper processes evictions become much easier.

Now it’s your turn for a final thought.

If you’ve ever evicted a tenant, tell me what the experience was like below in the comment section. If you think this article would have helped you I’d like to hear from you even more!

You Got Your Lease WHERE?

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Paperwork Is A Key Component Of Your Business

Leases, contracts and landlord paperwork

And this includes your lease! Your lease is the single most important document you can have with your tenant as it sets the groundwork for your relationship.

But have you even read it?

I’ve talked with hundreds and hundreds of landlords and read dozens and dozens of different leases and the things I’ve seen have made my head spin.

From landlords who don’t bother with leases and just do everything verbally to hand me down leases that aren’t even legal in the state or province they are being used it.

You Need A Legal Lease

That’s part of the reason I’ve decided to work with LawDepot.com to help make sure more of you have the proper forms in place. LawDepot approached me last year about advertising on my site and I held off at the time, but the time felt right now to add them as as option for visitors here.

From leases to eviction forms and everything in between and around, they have the forms you need to protect yourself properly and to make sure you are doing your business right.

Now, to be completely transparent I do receive a commission if you do purchase through them, so it helps me as well, but more importantly, it gets the right forms in your hands.

To find out more, go visit them at www.LawDepot.com (that is an affiliate link) and see if they can help.

Alternatively you can also do some research and find a local apartment owner association. Groups like this often offer lease packages that tend top have the most current and up to date clauses and wording in there packages.

I’d definitely recommend you stay away from the off the shelf type products you find in office supply stores. These packages often tend to be extremely generic and tend to miss-out on specifics that would affect you in your state or province.

I’m Just Your Typical Landlord Hypocrite

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This is probably where I need to say, do what the landlord says, not what he does!

I have to confess, I’m breaking my own rules. Now I guess in the big picture that’s not a huge issue, but when it comes to a tenant owing me a ton of money and me suddenly finding myself sucked into the Eviction Spiral, it gets a bit serious.

After all, I’m supposed to be the expert, yet I’m making the same mistake I tell you not too and I guess I better tell the entire tale. So let me take you down the garden path….

Landlord story, down the garden path with a tenant

 

This actually dates all the way back to December with one of my weekly rental tenants. He’s a very clean neat individual, but a) he doesn’t speak very much english and b) he owes me money.

As we zip back a few months to the beginning of December as typically happens to many of my rooming house tenants they vacate around mid month and head back to where their families are located. It’s typical as many of the construction projects close down early before Christmas and many of the workers get to enjoy a two or three week break and trades folks are who I cater too.

So this is something I tend to see every year, then in January they start coming back, rooms fill up and it’s business as usual. Now my nice clean non-english speaking fellow named Michel had no one to go home to. No family around, nothing, so he intended to stay at my property over the break. the only issue being, he had no income coming in to pay for the room. (This is where the hypocrite part comes into play!)

As I weigh my options I have a few things to consider a) he’s a good guy, b) he’s been good about paying in his past history and c) I have a bunch of vacancies anyway and if I kick him out or he leaves I still won’t be collecting rent for that room and I don’t know what the next guy will be like and how many weeks before there could be a next guy.

So I did the easy thing, I let him stay.

Fast Forward to January

calendarI just happen to live in an oil based economy region so as January rolls around many of the projects have moved to a hold status due to the uncertainty of oil prices and the viability of some of these projects going forward if oil stays low.

Instead of starting work at the beginning of January, it turns into mid January, then late January and finally the beginning of February before he finally lands a job. the good news is, he gets paid a lot per hour, so it own’t take too long to get caught up. (Now I don’t want you to read anything into this, but I’m talking about getting caught up in February and here it is March when I’m writing this…)

Anyway, according to my rules, I should have cut bait and recast already. instead I go with my gut and give him more time. This is the part where YOU need to do what I say and not what I’m currently doing with this guy.

Now Fast Forward to Late February

Now we’re in the last week of February and I get a text update from him (he uses French to English conversion to send me texts, sometimes it is very very confusing). This set of texts though is quite clear. He will have $2,000 for me on Saturday the 28th (yes, I let a weekly tenant rack up an outstanding balance of over $2,000, please find me a wall to bang my head on).

As you can imagine I’m pretty upbeat when I go to meet him Saturday, at least at first.

You see, he lost his bank card and couldn’t withdraw the money.

Is it time to panic yet?

Of course he can’t tell me this due to the lack of conversational English between us, but he has notes that someone obviously wrote out for him in English. So now I’m stuck in a tight spot. It’s the Eviction Spiral I referred to originally.

If I kick him out, I take a huge loss, so I have to take a stand.

His notes tell me he will go to the bank after work Monday get the cash and get a new card and will have the money for me Tuesday night. Experience tells me this is the perfect getaway for him.

If he has $2,000 that is enough for him to get into a new rental place, with the 1st being the next day, it’s an optimum time for him to skip out.

But I follow the hypocritical emotional road and lay down the line, Either I get paid Tuesday or he GETS OUT!!

Even in our lack of a mutual language I am quite sure I got my point across, now I play the waiting game.

My question for you, what would you have done?  Let me know your thoughts in the comments below and I’ll add an update Wednesday about what happened!

Update Friday

Just to make this worse, I’ve extended to tomorrow. The tenant paid $200 to buy a few more days, but tomorrow is the cutoff. I meant to update Wednesday, but it’s been one of those weeks that will likely be extending out for the entire month!

Poof, It’s Magic!

Yes, I’ve had another tenant disappear…

I was at the property Monday to get some work and cleaning done there (I rented a steam cleaner for the day, so I was bouncing from property to property to get the most bang for my rental dollar) and my tenant’s room was wide open, all his items were gone, the room was quite clean, his keys were on the dresser and he was gone.

Bottom line, I’m out a bunch of money, my faith in humanity is eaten away a bit more and in the end I can still sleep at night. I tried to help, deep down I knew it probably wasn’t going to work out for me, but as part of my nature I really do want to help people (hence this site!), just along the way I may have to take a little damage.

The hypocritical lesson to pass along is if things are really tight, you can’t take this chance. You need to clamp down immediately. I could probably rationalize some of the loss as I would have had a vacant room for multiple weeks anyway, but it’s still a loss. If you have more losses than wins, you eventually lose and in Real Estate, you lose big when you lose.

 

Renting Out Rooms In Your Home

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The Ultimate Mortgage Helper
Renting Out Rooms

running a rooming house - renting out roomsWould an extra $400 or $500 a month go a long ways towards helping you make ends meet? Have you thought about renting out rooms in your home?

Looking for a method to get your house paid off faster without having to change your spending habits? Do you simply have too much space in your home that could be used to generate cash? These could be signs that renting out rooms might work for you.

Or maybe not, as this isn’t for everyone! But there are thousands of people using this tactic to help them get by, to increase their cash flow and to get their homes paid off quicker.

If you’re outgoing and enjoy meeting new people, this could be awesome. If you like your own space and like having your friends over and staying up late, maybe not. It’s not for everyone, but if you can make it work for you for a couple years it can be an incredible option.

The Caveats

First off, you’re letting a stranger into your home. While this can be offset by thoroughly screening the tenant (if you intend to go this route, be sure to take my Educated Landlord Tenant Screening Course), there’s no guarantee you will get along with them.

You could also offset this by renting the room to a friend or family member, but this can open a whole new set of issues. It’s one thing evicting a stranger for non-payment of rent, but it can make family Christmas dinners a tad awkward when you have to kick out cousin Jimmy for the same reason.

Second, you will need to be very familiar with the local rules for renting out space in your home. Do you fit under the local landlord laws, or a subset of the laws? In my region if the landlord lives int he property and shares common space with the tenant like living rooms, kitchens and bathrooms they fit under different legislation which is much more in favor of the landlord.

Knowing the difference can change how and what you can do with problem tenants and this can definitely take stress off of you knowing the law is on your side!

Third, your boundaries may feel restricted. Now it’s not just your space, but common space. If you’re used to just leaving your clothes or dishes lying around, you will be setting the standards for the house.

You can’t expect your tenants to follow the rules you set if you can’t live within the same boundaries.

If you found this article about renting rooms interesting, you’ll also enjoy these

Profiting From Renting Out Rooms

Renting Out Rooms In Properties

I’ll also have some upcoming courses on how to set up a rooming house, run a rooming house and even analyzing a property to see if it works






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Hey Baby, It’s Cold Outside

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Can you evict tenants in the winter?Winter Evictions

If’ you’ve never heard the song “Hey Baby, It’s Cold Outside”, you’re missing out, it’s a classic. If you don’t know what the rules are about evicting a tenant in the winter where you live, you could be missing out on some cold hard cash, like several months worth of rent.

The rules are different everywhere and with the temperature hovering around -30 degrees Celcius (-22 Fahrenheit) with the wind chill as I start writing, I thought winter evictions might be a timely topic.

Can You Evict Tenants In The Winter?

I think the most common answer is yes, but it can depend. I know, not very definitive as far as an answer goes. Ask tenants and they will almost all answer no, but if you’re getting landlord advise from your tenants you may have a much bigger problem…

The problem is the rules vary from state to state and province to province and it would be unrealistic to know the specific answer for every city, town, state, province, district or country throughout the world. But that’s where the internet comes into play.

I did some quick research and actually couldn’t find any places that allowed tenants to stay, just because it was winter. I started by specifically looking at provinces and states that were known to be more tenant friendly and cold.  I looked at rules in New York state, Minnesota, Ontario, Quebec and Alaska to name a few and all seemed to be pretty specific.

Evictions can take place at any time of the year if tenants are in breach of the lease. Now to be fair, I didn’t check every state, province, city and town, so you’ll want to do some local research of your own just to be well educated about it!

Winter eviction of tenants

However, just because it isn’t illegal to evict them, there is not guarantee it can be done quickly. There is a ton of leniency built into the laws when it comes to issues like compassion, hard times and basically bad luck. Here it isn’t written anywhere how much time someone has to be out of the property when evicted.

This gives judges and hearing officers the ability to make decisions based on the evidence and this could mean a quick and effective eviction in more grievous situations. While in other cases they can be given 90 days or longer, but with specific conditions in place or it can accelerate the eviction timeline. These would typically be payment conditions, but depending on the scenario they can vary.

Have you evicted a tenant in the winter? If you have leave us a comment and let us know where you’re at! Maybe we can form a mini database of info right here!

To get it started, I’ve not just evicted tenants in the winter, I’ve also done it right before Christmas and no I’m not the grinch, I just play one on TV! Looking forward to your comments.

Why Thinking Like A Tenant Pays Off

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Landlord thinkingAs a landlord you often have to think carefully about your property. There are monthly costs to consider, maintenance issues to budget for and mortgages to cover just to start with.

Throw on dealing with tenants, potentially property managers, keeping neighbors happy and the list gets longer and longer. You simply think differently when you’re a landlord and the property is a huge investment you need to manage, maintain and care for.

Yet one aspect we often overlook is thinking like a tenant at times, rather than constantly wearing our owner’s hat.

What Would Your Tenant Think?

As an owner your costs seem to continue to grow. Taxes increase, utility costs increase, legal fees increase, everything seems to be increasing, all at your expense.

One way to combat this is to pass these costs onto your tenants by raising rents. Now, I covered how to go about this in a previous article (Raising Your Rents Without raising The Roof), but the important part about it that I didn’t talk enough about is to think like your tenant!

If you just show up minutes before the cut off of when you can legally raise the rent and throw a rent increase notice in your tenants face you could be setting yourself up for trouble. Just imagine how you feel when you suddenly see a huge increase in fees from your bank or a large jump in your taxes.

It’s the same for the tenants. All they see is a money grubbing landlord looking out for themselves and jacking up there rent for no fair reason. They don’t see the three years prior where you couldn’t or didn’t raise the rents, they don’t see the vacant months that you covered right out of your pocket, they simply see a big fat increase that affects them.

In the previous article, I talked about positioning and explaining why you’re increasing the rents to help soften the blow. But part of the explanation I didn’t cover was planning further ahead.

Don’t React, Lead The Market

Landlord leadershipYou’re running your landlording like a business. You know that costs increase over time and you know that your tenants rent will be going up, even if it’s just $25 or $50, in six months, so why not let them know there will be an increase way in advance?

You don’t have to specify how much, just that you’ve been reviewing some of the costs and local rents and expect there will be a small increase in the future. Again, you value them as tenants, so you’re going to do something that is fair to both of you, so make sure they are aware.

Now, rather than reacting last minute you are leading them and you can make a decision that works for potentially both of you. If you see that your costs haven’t really increased and the tenants are fabulous, you may come back to them in another couple of months and let them know upon re-examination you’re going to hold off on any increase this year.

Or you may simply go in with a small $25 increase to cover minor increases that you’re having to cover for anything from taxes, to bank fees to insurance. Or, if the market has skyrocketed you may need to consider increasing rents by much more so as to not miss out.

However it plays out, you’ve forewarned the tenants in advance so they aren’t completely blindsided.  Now, rather than being upset, they typically appreciate the advance warning and can make plans to either move on, allowing you to put people in at the higher rate, or to prepare to absorb the additional costs.

Expanding on this you can also start including tenants on longer range plans.

Preparing For The Future.

Sometimes you know you have work coming up in the future on your property, so why not include the tenants in the updates?

Whether it’s a new roof, a new driveway or even a new fence, let the tenants know the proposed plan. If you’ve started to plan to get the roof done in the spring or the rotting deck upgraded before summer, give the tenants advance warning and let them know so they can prepare.

Once you talk with them who know what else you can discover. Maybe they are going to be away on vacation for a week and you can coordinate your project to take place while they are gone?

Now it’s very little inconvenience for them and they are rewarded with a new roof ,deck or some property improvement that makes their enjoyment of the property better upon their return.

If you start working with your tenants and thinking about what makes them happy and perhaps a little more prepared for you, it starts getting easier to keep them longer all while keeping them happy.

It’s a win win for everyone! Are you already thinking like a tenant? Or do you simply leave your landlord cap on and push forward upsetting tenants and replacing them every year? Tell me how you prepare for the future!