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we recently inherited some properties in California when my grandfather passed and this is all new territory for us. my father has been getting inquiries from potential renters but doesn't know how/where to turn for reasonably-priced credit checks. can you please tell us where to go? he is trying to avoid anything that would require a subscription and that is costly seeing as how most of these applicants turn out to be flakes.
also, is it customary and/or legal to charge the applicant the credit check fee up front?
Not one of you is ready to start managing rental properties, or have anything to do with the rental business. Start by reading your state's tenants/landlord law (sticky on this forum), follow that up with plenty of literature about renting/landlording
If you try to get into the business knowing nothing, and hoping to get started with a simple, 3 minute post on this forum, you are gonna have a very bad time.
My recommendation? Sell the properties.
My better recommendation? Educate yourself about the business, the laws as they apply to you and your future tenants, and then and only then start looking at renting the properties.
Best of luck, you are going to get great advice on this forum. I hope you respect it and follow it, or you'll be back here in a few months and start adding your own horror stories to the collection.
I'll add that until you know what you're doing, hire a reputable property management company to take care of everything for you. The price you pay will be well worth it. This is a tough business which you can't walk into knowing nothing. Good luck.
The pitfalls are great... especially in the position of running a business in California.
Either sell or interview management companies...
If you are serious about going it alone... at least join the local apartment owner's association and check out a copy of Landlording from your local library and don't forget the California Landlord Tenant Handbook available online from the Department of Consumer Affairs.
I still use my apartment association to run credit checks and the cost can range from $7 to $30 depending on what you are checking... again, California State Law governs the exact amount a landlord can charge.
Never charged a credit check fee on the rentals I own... I screen thoroughly first and only run the check when everything else is OK... mostly, I run the check to see if the applicant has been honest with me. I let them know ahead of time that I don't like surprises and have had some decide not to go further on the spot.
Another point... are you or your father geographically close to the properties... I manage rentals and will hire a management company for those that are just too distant for me to take care of.
Not one of you is ready to start managing rental properties, or have anything to do with the rental business. Start by reading your state's tenants/landlord law (sticky on this forum), follow that up with plenty of literature about renting/landlording
If you try to get into the business knowing nothing, and hoping to get started with a simple, 3 minute post on this forum, you are gonna have a very bad time.
My recommendation? Sell the properties.
My better recommendation? Educate yourself about the business, the laws as they apply to you and your future tenants, and then and only then start looking at renting the properties.
Best of luck, you are going to get great advice on this forum. I hope you respect it and follow it, or you'll be back here in a few months and start adding your own horror stories to the collection.
.
Chill out. they said they 'recently inherited' the property...give them a break.
Koale
girlmom4, .Most serious tenents will bring you one of the free credit reports that they can get each year. In over 30 years of landlording I've never run a credit check. Not arguing against them but some people ONLY pick the highest credit number and don't pick the best tenant for the property.
If you are not familiar with Prop 13 then you inherited MORE than just the properties. First Uncle Sam will step up your basis meaning no capital gains if you sell now or only the difference in value now and when you sell down the road. Pretty good deal. But, Uncle Jerry could well be subsidizing your new rental business to the tune of $10,000+ per property each and every year! That's because with Prop 58 your father can keep granddads low property tax base. He can then transfer to you and you can transfer to your kids down the road. Hopefully, you did not inherit the properties directly because then you would lose the base. Here's where alot of probate attorneys screw up in CA when they don't make provisions for the tax base that can be worth hundreds of thousands of dollars over time.
If you have never owned/managed a business I would also second getting property management help at the beginning. Good luck, California property can be a gold strike!
We belong to AOAusa.com, which is for CA specifically.
They have local offices and we were able to go there in person to sign up, ask our questions, etc.
It's $79 to join, and then if you want the FULL credit report of applicants (instead of just an "A," "B," etc grade), you also have to be inspected (wherever you do your business) for $59 by a third-party company. You need to have a locked filing cabinet, shredder, and your computer needs to be password protected... that was pretty much it. A fax machine would be good too, especially if it has a copier on it also.
AOA has all of their own forms they provide you, which is ... good and bad. Good because maybe if you don't quite know what you're doing, they have the forms for you. Bad because we already have our own lease agreement that we like better than theirs, and they will only "advise" you on their forms. Yep you can call them up and ask questions, or if needed, there are lawyers they can refer you to who will also answer your questions for free (probably a 5-10 min call at the most, though, each time).
But we've owned property for years now, and only recently joined them. So we (pretty much) know what we're doing already. (; I would totally recommend them. I never looked into any other association ...
Oh, and YES. If they want to apply, have them pay you up front. AOA has a variety of things you can check, so the price you charge may depend on what you want checked. HOWEVER, you are supposed to check the SAME thing for EVERYONE... so if you want the background check, it needs to be done for everyone (i.e. no stereotyping and only wanting to check the criminal background of specific people and not others).
my father is trying to sell but the properties are in a depressed area so he is a reluctant landlord. he does have a property management company for a few of the properties but is not impressed and thus trying to learn the business and do it himself. thanks again.
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wow...
