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Thanks for all the valuable inputs guys. I borrow the Landlording book from the library. It has some great insights but a bit outdated in the way it recommends doing advertising and such.
Quick question, I have a lady who is helping and willing to cosign the lease for her son who goes to Uni and works part time to move in with two of his friends. She said they will be responsible for the rent but she's willing to help them out. Who should I do the credit check and employment checks? For the employment check, can I ask the HR department how much they make? What else do I need to do in this case?
Save yourself a lot of trouble and hire a property management company.
Quick question, I have a lady who is helping and willing to cosign the lease for her son who goes to Uni and works part time to move in with two of his friends. She said they will be responsible for the rent but she's willing to help them out. Who should I do the credit check and employment checks? For the employment check, can I ask the HR department how much they make? What else do I need to do in this case?
You run the checks on those who will be renting the unit. When doing a local check on your own wage verification, its probably best to state the approximate wages the applicants told you and just ask the employer to verify the approximate number. Most will do that versus giving out other information. If they say its a good figure, no issue. If they balk and indicate its not that amount, what do you care if it's too high or too low, the applicants lied to you and thats enough to deny them the unit.
If they do not qualify on their own, thats when a co-signer can be brought in. The Cco-signer can be listed as an occupant or just a responsible party. As occupant, they are responsible just like the tenant for the place. As a responsible party, they are not responsible for the unit, but are fully responsible for the rent just like thre tenants. They ARE NOT helping out as a co-signer, they are fully and legal financially responsible for all monies due and owed.
Thanks for all the valuable inputs guys. I borrow the Landlording book from the library. It has some great insights but a bit outdated in the way it recommends doing advertising and such.
Quick question, I have a lady who is helping and willing to cosign the lease for her son who goes to Uni and works part time to move in with two of his friends. She said they will be responsible for the rent but she's willing to help them out. Who should I do the credit check and employment checks? For the employment check, can I ask the HR department how much they make? What else do I need to do in this case?
I would run the credit/background check on the co-signer to make sure she actually has the credit and money to actually co-sign. I would also do checks on the people who will actually live there.
I would also (if your state/city allows) put something in the lease about no keg parties and I would also put something in about guests and how long they are allowed to stay etc.
The employer should be able to verify income. I would also verify length of employment as well.
Save yourself a lot of trouble and hire a property management company.
I agree. In no way are you ready to become a landlord and there's no crash course to take to prepare you quickly. The cost of a property management company to get you started off on the right foot and afford you the time you need to learn is a very small price to pay compared to what you can end up with in damages. Being a landlord is a business and you don't forge ahead and open up any business when you don't know how to run one unless you're prepared to lose everything.
I can't recommend enough two resources for new or prospective landlords.
The first is joining your local rental housing associations... most will have all the up to date forms required in your location and many provide free or low cost lawyer consultations.
The second is a book called Landlording by Leigh Robinson... I know Leigh, we met several years after I bought one of his first editions... Landlording is a good, easy to read common sense approach to operating rentals.
A couple of more thoughts...
As mentioned, you will be running a business... so be sure to think and act like your are... that is be professional.
Another point is it will become very costly if you need to call someone for every little thing that might come up... especially starting out.
If afterwards you feel that being a landlord is not for you, you can hire a management company for a percentage of the rent. You may find it is worth it. Good luck. I hope you find some great long term tenants.
From personal experience as a LL, I could not disagree more.
Go to your local Google Reviews and you'll see that most property managers are rated pretty low. I hate to call it a bottom-feeder business but it largely is. Lots of managers are failed sales agents that couldn't make their quota so they dropped down to become leasing agents.
So many of them operate by creating problems for owners and then charging fees to remedy them. That's where the money is. The manager gets the rent sent directly to them from the tenant. From there it's all about finding ways to pay the owner as little as possible. They can keep the rent money and tell you that the tenant didn't pay. And it's VERY common for them to charge ridiculously high fees for work that may not have been performed. Do you want to be charged $100 to have a front lawn mowed? Or have them keep $80 of the months rent to change a battery in a smoke detector?
They can move a non-paying tenant into your property and do nothing while the house is worn out with abuse, and when the dust settles their excuse is "Being a landlord is a risk and we can't guarantee anything".
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