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I just got a small property that I need to rent out, I really can't afford a situation where my tenant doesn't pay rent for months and I'm back and forth at court trying to get them out,this is NYC , it's a tenant state, and I've heard horror stories,I'm thinking month to month is the way to go, at least until I'm sure that I don't have a crazy or deadbeat tenant , has anyone any experience with month to month leases, do we still need to sign a lease agreement, do I need to give a reason to get a tenant out ? do I still need to go to court to get a month to month tenant out ?, what is the eviction process like ?
I don't think that avoidance of a deadbeat tenant depends on whether he is month to month or 1 or 2 year lease.
You just gotta do due diligence to make sure you don't rent to somebody who will skrew you over.
A large security deposit helps a bit. A tenant with a dependable job helps even more.
I just got a small property that I need to rent out, I really can't afford a situation where my tenant doesn't pay rent for months and I'm back and forth at court trying to get them out,this is NYC , it's a tenant state, and I've heard horror stories,I'm thinking month to month is the way to go, at least until I'm sure that I don't have a crazy or deadbeat tenant , has anyone any experience with month to month leases, do we still need to sign a lease agreement, do I need to give a reason to get a tenant out ? do I still need to go to court to get a month to month tenant out ?, what is the eviction process like ?
You have to make sure the prospective tenant is financially stable. Require the tenant to make 40x the monthly rent. So if you're asking $1,500 a month in rent, $1,500 x 40 = $60,000 annual gross income required by the tenant to qualify for the apartment.
Require prospective tenants to provide W2s, most recent tax return, 4 most recent bank statement and work pay stubs to verify income. Do not accept tenants who you can not verify their income such as cash salary they receive under the table. There is no way to verify any amount they claim even with a letter from his employer as the employer may be buddy, buddy with the tenant and write whatever is required to make you think he earns a good living.
Despite you wanting it to be a month-to-month tenancy, ALWAYS have a lease that spells out the terms, price, late fees, etc.
Credit check as well as criminal background check is a must. I recommend the tenant have a score of 650 or better. Any tenant who has below a 650 score would be considered a "high risk" tenant. At that point you can either deny them or require they put an additional security deposit if you wish. Also I recommend you charge between $50-$100 for an application fee which will weed out the riff-raff tenants who are not really serious. When they are willing to put some skin in the game, it usually means they feel comfortable they meet your rental criteria.
The month to month lease does matter and it is important because they have no right to stay in the apt, which is what a 12 month lease provides. If the tenant stops paying in month 3 and they have a 12 month lease...you can bet that the judge will work with them to stay in the apt through the term of the lease = you are screwed. If they have a month to month lease and stop paying in month 3 they are just a month to month tenant and can much MUCH more easily be evicted.
I recommend 40x the monthly rent, minimum 650 credit score, 2 recent bank statements (to confirm income AND confirm they have savings in the account to cover any hardship), 2 recent pay stubs. I also recommend NOT renting to people with kids, particularly single moms because 1. They are the hardest to evict and 2. They have "boyfriends" who come and go, fighting, drama, etc. This is of course illegal but you have to protect yourself cuz the city is not on your side, ever. Do rent to people with pets though, just add a nonrefundable pet deposit of $100-$300 bucks. I also would not recommend taking any government subsidized tenants (section 8 for example)...too many problems/bad tenants. This too is illegal (but only in NYC), but like I said, you better look out for yourself cuz the city does not care about you...once they are in..they are your problem.
And lastly, be sure that they are a good fit for the building. What do I mean? Well you don't want college kids moving in who will tend to stay up late, play loud music, wreck the place UNLESS you fill the entire building with them...in which case nobody will care. OR don't rent the apt to someone who plays the drums...your other tenants will hate you, them, and move out. The type of tenant is just as important as a well qualified tenant, and oftentimes more important.
The bottom line is this: If you do your due diligence up front, and take your time finding the right tenant, which means the apt could be vacant 3 months (or longer), it will be highly unlikely you get a deadbeat tenant. Of course nothing is guaranteed, but it's all you can do and the only control you have is selecting a tenant. Once they are in, that is it. If you simply accept the first person to show up with cash, or take someone who doesn't fit you requirements (they all have excuses/stories), you will only be screwing yourself. Ultimately I would rather leave my apt vacant for 6 months than take a subpar tenant because it will be nonstop headaches and easily a year with no rent...the choice is yours.
The month to month lease does matter and it is important because they have no right to stay in the apt, which is what a 12 month lease provides. If the tenant stops paying in month 3 and they have a 12 month lease...you can bet that the judge will work with them to stay in the apt through the term of the lease = you are screwed. If they have a month to month lease and stop paying in month 3 they are just a month to month tenant and can much MUCH more easily be evicted.
I recommend 40x the monthly rent, minimum 650 credit score, 2 recent bank statements (to confirm income AND confirm they have savings in the account to cover any hardship), 2 recent pay stubs. I also recommend NOT renting to people with kids, particularly single moms because 1. They are the hardest to evict and 2. They have "boyfriends" who come and go, fighting, drama, etc. This is of course illegal but you have to protect yourself cuz the city is not on your side, ever. Do rent to people with pets though, just add a nonrefundable pet deposit of $100-$300 bucks. I also would not recommend taking any government subsidized tenants (section 8 for example)...too many problems/bad tenants. This too is illegal (but only in NYC), but like I said, you better look out for yourself cuz the city does not care about you...once they are in..they are your problem.
And lastly, be sure that they are a good fit for the building. What do I mean? Well you don't want college kids moving in who will tend to stay up late, play loud music, wreck the place UNLESS you fill the entire building with them...in which case nobody will care. OR don't rent the apt to someone who plays the drums...your other tenants will hate you, them, and move out. The type of tenant is just as important as a well qualified tenant, and oftentimes more important.
The bottom line is this: If you do your due diligence up front, and take your time finding the right tenant, which means the apt could be vacant 3 months (or longer), it will be highly unlikely you get a deadbeat tenant. Of course nothing is guaranteed, but it's all you can do and the only control you have is selecting a tenant. Once they are in, that is it. If you simply accept the first person to show up with cash, or take someone who doesn't fit you requirements (they all have excuses/stories), you will only be screwing yourself. Ultimately I would rather leave my apt vacant for 6 months than take a subpar tenant because it will be nonstop headaches and easily a year with no rent...the choice is yours.
I agree with Sobro's post. I personally don't like renting to people who have dogs. Sometimes I may make an exception with a $300 pet deposit and the dog must be under 25lbs. But overall I don't like dogs in my building.
Thanks guys, I must admit,now I'm nervous, the unit is in a not so good area of Brooklyn, surrounded by NYCHA project housing, it's small and is basically two studios upstairs and a larger one downstairs,I intend to use the downstairs unit as my office, I'm currently renovating, and I have had a few locals stop by and ask if I'm interested in renting it out, a realtor told me a while back that for the area my best bet was section 8 because the govt would pay on time and regular people might not, but like you pointed out Sobroguy, section 8 tenants can be dodgy, a friend had a tenant that hit all the boxes you mentioned, single mom, section 8 and with an unstable boyfriend, he ended up committing suicide in the apartment, and the whole situation was a nightmare. I can't really afford to lose the income that the units represent, but I guess no tenant is better than a bad tenant, what is your take on going through a realtor would they do a better job at screening out bad tenants ?
Sobroguy, hilltopjay Why don't both your guys create a sticky on the nyc for land lording in nyc? You both have a lot good information and experience for new land lorders. Many nyc property owners could benefit from your info.
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