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apartment lease agreement? Rental advice?

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apartment lease agreement? Rental advice?

Old 01-11-2010, 05:43 PM
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cjd
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Default apartment lease agreement? Rental advice?

I just found out I am losing my tenant of 7 years. I am crushed, as she may have been the best tenant in the world. She was not on a lease for the last 5 years (good thing, as I lost my copy 6 years ago).

Does anyone have an electronic copy of a lease they might use for their properties?

Also, any thoughts on what kind of background check I can do, or any suggestions on how to cull the good from the bad? I have never had to evaluate renters before, and I am not sure what kinds of things I should be looking for.

I am thinking a months security deposit, but again, I am not sure what is standard.

Thanks in advance for any help you folks can give me.
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Old 01-11-2010, 08:20 PM
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I would suggest obtaining a lease from a local property management company that rents homes in YOUR area. You can also purchase one from a real estate attorney. (I think I paid $85 for mine, well worth it, as it has been tested in the courts)

Different states have different laws and regulations, so using a generic lease from an online distributor or someone from out of state can leave you lacking in protection and landlord rights.

Use a background check service, check CRIMINAL, PERSONAL, CREDIT AND RENTAL HISTORY! There are plenty of these services to be found online or in the yellow pages.

First month, plus a security deposit is what I require. I make the security deposit a less amount than the monthly rent. This will prevent them from thinking they can use it as their last month's rent when they leave or if they are skipping out on you. Stress the fact that you will go to court to enforce the lease!!

To insure on time rent payments I use $50 per month bonus if the rent is paid on time, this is refunded after 12 monthe of on time payments. If it is late one month the bonus goes away until next year. I also charge the max late fees and bad check charges.

There are books you can read that have pages of useful info on this subject. I know what works for me and how much ''crap'' I will tolerate. You have been very fortunate with your present tenant. Times are more difficult now so be careful and do your homework to prevent a disaster.

Remember this, most prospective tenants will tell you anything to rent your place, I have heard most of the ''lies'' in my 18 years as a landlord. The background checks don't lie, they may not tell the whole story but they will give you a tremendous insight into the person you are looking at.

Also, there are alot of folks with recent foreclosures and bankruptcies on their credit reports. They may have a great paying job but got irresponsible with their home purchase. These folks should be looked at hard as they have the ability to pay the rent, just not the credit worthy background. Charge a higher deposit, write a 6 month lease to ''try them out'' and let them know that you will report their payment history to the credit bureau. This will help them get established if they pay on time or it will lock them out of any future rental if they screw up.

Good luck and do your homework!
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Old 01-11-2010, 08:20 PM
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Security deposit that equals at least the monthly rent.
Credit report.
Job verification.
Past rental verification - payment history.
Written lease that satifies your state requirements.
Move in inspection - kept in file.
Make sure to dot i's and cross t's.

One last suggestion.....
Use a professional.
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Old 01-11-2010, 08:38 PM
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no response can be made to the question until we can factor in the type of property, amount of the rent in relation to property value, etc. If you have a $500/month apartment to rent, then take $500 with deposit or $550 without. Low income people can afford rent a lot more than they can save money for deposit.

If the rent is $5000/month and your place is furnished appropriate to the rent, then two months of deposit are in order.

The laws in your jurisdiction come into play, too. Down here the judge just loves deadbeat tenants, so getting eviction is a long, expensive process. We have to cut cable, mess with A/C units, etc. in order to induce the deadbeats to move out. If your jurisdiction is more land-owner friendly, then you can fudge the terms a bit more because you have a friend in the court.
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Old 01-12-2010, 04:20 AM
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Most of my clients that have rental properties do all of these

SECURITY DEPOSIT

Utilities NOT INCLUDED and NOT IN YOUR NAME(that is a biggie)

Background check

References from other landlords, like one attorney told me renters know the law that pertains to renting better than the lawyers do and a lot use it to their full advantage

DO NOT BE A NICE GUY, does not mean you have to be an asshole but is business and hate to say it but when you help someone out they do not return the favor. Seen couple of clients end up in court after they bent over backwards to help a tennant

Be firm on your pet rules, yard maint, trash disposal and most leave themselves open for a periodic inspection
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Old 01-12-2010, 04:36 AM
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Originally Posted by cjd View Post
Does anyone have an electronic copy of a lease they might use for their properties?
I bought a book called "Every landlords leagl guide" or something like that? It came with a cd that had all kinds of documents on it, lease agreements etc..
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Old 01-12-2010, 05:46 AM
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Alot depends on the area you are in. Im lucky in that my units are all in downtown Boston. Standard here is for the tenant to pay a brokers fee of one month. I use the same broker for all my units. I also get first and last. Security requires accounts with their SS # for each one. Kind of a pain when you have many units. Most people coming up with 6 grand are decent people. Broker does all the work from showing the apts to checking the credit etc. Depending on the unit you may be forced to accept tenants. In Mass you can legally discriminate against anyone if it is a 2 family and you live in the other unit. Section 8 housing may apply also. In lower income areas you can usually overcharge and you know most of the rent is good. Ask prior landlords if any notices to quit/ eviction proceedings were initiated. You may not get the truth because they are trying to get rid of the problem tenant and unload it on to someone else. Depending on the heating system you may want to require them to maintain a service contract with oil/gas company. It happens rarely but the worst thing you can have is a scumbag tenant. In Mass. its a nightmare to get rid of them. Just had a kid with credit issues-repod car and landlord chasing him. Told him sorry. His mom offered to prepay for a year to get him in. No thanks. Dont need any headaches. Winter is also a slow time to have vacancies here. I would consider upgrading the unit if it is Dec jan or feb vacancy. You may lose the months anways so might as well make it nice.
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Old 01-12-2010, 07:22 AM
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I have a lease let me edit out our details and Ill send it to you. I believe it has eviction details that pertain to the state of SC which is a landlord friendly state that may not apply to MD
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Old 01-12-2010, 08:00 AM
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First you need to hire a personal Aty., then a legal Aty, and to be safe an Aty who specializes in rental properties. You will also need to hire a Realtor who specializes in rental properties and a professional person to do extensive background checks going back 5 years. You will also need to bring in a property inspector to go through the house with you and the renter. Or you can go to Office Max and buy one of their lease agrements where you just fill in the blanks.
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Old 01-12-2010, 09:05 AM
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Most insurance policies have a vacancy clause......make sure you have coverage on your vacant properties. They normally will void coverage after 30, 45 or 60 days. It can be a very expensive lapse of coverage....
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Old 01-12-2010, 09:22 AM
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Originally Posted by triguy7 View Post
Most insurance policies have a vacancy clause......make sure you have coverage on your vacant properties. They normally will void coverage after 30, 45 or 60 days. It can be a very expensive lapse of coverage....
Most have a clause for theft and vandalism which will drop after 30 days vancancy but the other coverages apply. All states are different so its something to check into.
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Old 01-12-2010, 09:45 AM
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My Farmer's policy has 45 day clause theft and vandalism. After 60 days everything is excluded.
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Old 01-12-2010, 10:34 AM
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Originally Posted by fishingfun View Post
First you need to hire a personal Aty., then a legal Aty, and to be safe an Aty who specializes in rental properties. You will also need to hire a Realtor who specializes in rental properties and a professional person to do extensive background checks going back 5 years. You will also need to bring in a property inspector to go through the house with you and the renter. Or you can go to Office Max and buy one of their lease agrements where you just fill in the blanks.
Do not use a generic lease unless you don't care about YOUR rights. This is not a place to cheap out especially when letting someone borrow your property worth hundreds of thousands of dollars!

Have a lease that is written for YOU, not the renter. If you do this long enough you will eventually end up in court to collect something from a renter (damage claim, back rent, unpaid rent from skip, etc.) That lease from Office Max may not hold the water you need to collect.
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Old 01-12-2010, 12:13 PM
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One thing one of my customers does is he adds $25 to what ever he wants for rent. He then says to the renter (in the lease) if you pay before the due date you get a $25 discount for paying it early. He says that he get most of his rent checks early and only about 1% pay on the due date or late. He has about 124 rental units.
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Old 01-12-2010, 02:58 PM
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Great advice here. I actually found a lease that is issued by my county (Montgomery county MD) and I will read through it tonight to see if if makes sense. I like the idea of adding $25 to the rate then giving them an on time rate. I am not too concerned about finding a tenant, though I want to be sure to find the right one.

I am not sure hiring a pro to manage this makes much sense, as it it one small unit (800 sq feet) and I am in the area, with a pretty flexible schedule. I will be talking to my insurance agent to be sure that I am covered. I was pretty close to judgment proof when I started renting it (poor and single) but I have a family to worry about now.

Dr Jim, I am going to look up that book you bought. I have been living on dumb luck with my last tenant, but I probably need to arm myself with some knowledge.

Nautiduck, I would love to see a copy of that lease, as I would be interested in comparing it to the county lease I found. Curious what landlord friendly looks like (compared to tenant friendly).

I am flirting with the idea of starting an LLC to put this unit under, but I think I might need to talk to a pro to see if that makes sense. Does anyone know if would have to transfer ownership from myself to an LLC in order to take advantage of the LLC structure (primarily sheilding myself from liability that might come from renting the place).

Thanks for all the help.
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Old 01-12-2010, 03:38 PM
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Chris,
One thing not mentioned is to go thru the unit just before your tennant moves in and take good pics of EVERYTHING! Keep them on a disc so you can proove condition when they move out.
Mike
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Old 01-12-2010, 04:31 PM
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I'm quite sure every state has a statute concerning landlord/tenant.
Here in Florida it's chapter 83.
I give my tenants a copy and you can be sure I have it memorized.
I also ask tenants to submit to a credit check, criminal background check, and drug test.
If they balk............so sorry. If they accept and pass, I pay for the checks.
I also prefer month to month leases. Best thing here in Florida
And I always get first, last and security.
I only have two units and they're paid for so no sweat if they sit empty.
Check the statute in your state and proceed accordingly.
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Old 01-12-2010, 04:45 PM
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Originally Posted by beenie View Post
Chris,
One thing not mentioned is to go thru the unit just before your tennant moves in and take good pics of EVERYTHING! Keep them on a disc so you can proove condition when they move out.
Mike
Its called "Statement of Condition"

go thru every room ceiling to floor, wall to wall, door to door heater to heater light fixture to light fixture. every appliance inside and out. anything that is new is noted new condition.
type it up and have tenant sign and you sign give them a copy. if you ever have to recover
damages beyond normal wear this will help greatly.


Been there done that almost 20 years

Good luck

Ps when the tenant pays for your house and your boat you know you`ve made it
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