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First, I did a few searches and didn't really see anything that I was hoping for.
(I'm new to being a LL)
1. Handling Deposits.
In Iowa you have to place the deposits in a separate account away from LL funds. (and 30 days to return the deposit upon move out)
I'm curious what other people do with their deposits. I was thinking that I would just have a savings account at my bank set up just for the deposits to sit in.
However, the interest rates are very minimal and I was wondering if there were better options out there? Obviously we aren't talking about a great deal of money to be earned but over time it adds up. (Deposits will amount to around $1,200-$1,500 in total)
I'm just curious what options are out there. Maybe a CD matching closely to the lease? Money market? Other?
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2. Lease agreements etc:
Where are people coming up with their lease agreements? I've found several free on line but didn't know if those were good enough. Did you take several and splice together to make 1?
I'm also curious about what you can and cannot or should and should not add in there.
Should I have an attorney draw them up? I don't want to spend $ if i don't have to if there are already adequate solutions available but I will if needed. Either way, I will likely have an attorney review it.
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These will all be college students and I'm planning to have the parents as co-applicants.
I was also thinking in addition to the lease agreement, I would need some sort of basic information/fact sheet. Kind of like an application?
I really don't plan on doing a formal application on these college kids like you would with most tenants, at least for a few years until my daughter graduates and I have to start screening them myself and make it more formal.
Right now it will be all "friends" and people she and her roommates pre-approve as roommates. (I know, I know)
Therefore I don't think an "application" is the right thing necessarily as it won't be a consideration in being a renter. I was thinking "fact sheet" and "lease agreement" (with parent co-signing)
Does that sound right to anyone? Again, I want something enforceable when and if it comes to that but the "selection" process is going to be pretty informal. For now. (I know what some are going to say but it's reality)
If anyone wants to DM me with a template lease/application/fact sheet etc that would be great. any help would be appreciated.
On a side note: Each person will have their own lease agreement. At least that is my plan unless someone has other ideas or maybe specifics on how those should be set up.
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3. Rent amount: Does this sound fair/correct?
The house we purchased is a single family home. Generally, if rented as a single family home in this area it would probably go for $700-800/month.
With renters (college students) I would anticipate our rents to be anywhere from $1,500-$1,625/month. Rent around $300-325/person.
There are 5 BR's and 2 baths. The tenants are responsible for all utilities.
We might be willing to let them have more than 5 tenants as the BR's are good size but I'm not sure if any break should be given on rent if they do double up. Maybe $50 off for sharing a room? There might even be a possibility of adding a 6th BR in the basement down the road. It wouldn't be hard with this house.
Does that seem fair/sound correct?
With all the extra wear and tear that a house will get with college students I see no reason not to be able to charge more total money. Based on what other LL's are charging in the area, it is definitely a bit higher. However, this house is in much better shape than any of the other college houses we've seen. Has more living space, larger BR/s as well as a nice laundry area in the basement. Plenty of parking, a nice fenced in back yard and good storage space.
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4. Organization: tips/tricks etc.
I would love to hear any and all ways you keep your rental business organized. From office organization to file creation and upkeep for a tenant to rent collection/records keeping etc. and beyond.
I am currently thinking everything will be paperless (scanned in) and kept in a computer file organized by tenant.
Any tips or tricks of the trade would be appreciated.
A tip. Have you checked your muni code for house occupancy? One area we know is one tenant allowed unrelated to the other tenant. No one else. Across the county line is three unrelated people. Not such a problem if you can get a few sets of siblings, which is not unusual in college.
First, you may want to ask the mods to move this to the Renting sub-forum.
1. Deposits are controlled by state law. Read the law in detail and understand your rights and responsibilities. It’s common for deposits to be placed in a security deposit holding account. Your financial institution should be able to help you with this if they are a business bank. Also fully understand your state laws on interest as it’s generally favor the tenant (you pay the interest to the tenant, not keep it for yourself).
2. The number of adult tenants and total occupants you can have in you premise is often dictated by local laws on a municipal/county level. Learn what they are.
Leases should be state/local/and landlord specific. Using a generic lease often ends up with less than generic protections for you. What you must include and what will be considered void in a lease is state law specific. It's always recommended to have your own legal advisor to review the lease.
You can read through the Renting sub-forum and see all the things landlords wish they had addressed in the lease.
3. If leasing to students, understand the pros and CONS of student renters as well as the problems of making arrangements with individuals and room rents versus a single lease covering everyone as one.
4. Find out how your court deals with records because the only time you will really need them in a particular format is when you end up in court.
A tip. Have you checked your muni code for house occupancy?
This is the first thing I was going to suggest. My only other advice would be to treat this the same way as if everyone were strangers: businesslike. You should go through the same procedures you would normally. Don't deviate from what you would normally do because the people involved are "friends". I learned the hard way; one of my worst tenants was a "friend of a friend". But, I suppose there will be a little bit of a check in place since they'll be living together.
1.Deposits
I have each of my rentals with their own account. Easy to track everything pertaining to that house. All transactions for that rental are from that account.
2. Lease agreement
I have each rental with its own specific ease agreement. Since they vary in HOA and type of rental I can't use a one size fits all.
3. Rent amount
I usually stay a bit under going rate. It let's me raise the rent without killing the tenants wallet.
4. Organization
I have used quick books but I'm not huge on moving money around all the time to have something to do. All my finances are kept separate. When I want to buy something I move money into a account earmarked for whatever I want to buy, then I go buy it.
I never did it but a friend said he gives a 10% discount every time the rent is on the first of the month. Some might ordinarily pay it then but this is an additional inducement.
First, I did a few searches and didn't really see anything that I was hoping for.
(I'm new to being a LL)
I'm going to repeat a few things that were already stated by other posters and add a little bit.
Quote:
1. Handling Deposits.
In Iowa you have to place the deposits in a separate account away from LL funds. (and 30 days to return the deposit upon move out)
I'm curious what other people do with their deposits. I was thinking that I would just have a savings account at my bank set up just for the deposits to sit in.
However, the interest rates are very minimal and I was wondering if there were better options out there? Obviously we aren't talking about a great deal of money to be earned but over time it adds up. (Deposits will amount to around $1,200-$1,500 in total)
I'm just curious what options are out there. Maybe a CD matching closely to the lease? Money market? Other?
It looks like in Iowa, at least according to this site https://coolice.legis.iowa.gov/Cool-...ode&input=562A that a LL in Iowa is entitled to keep the interest on security deposits for the first 5 years of a tenancy.
In Iowa, landlords must place a tenant’s security deposit in a separate:
Bank account,
Savings account,
Loan Association,
Or
Credit Union.
The institution where the account is located must be insured by the federal government. The security deposits cannot be commingled with any of the landlord’s other funds. The account does not have to earn interest, but if it does earn interest, any interest earned on the deposit during the first five years of tenancy belongs to the landlord.
Is this why you are asking where to put the security? If you have a financial advisor, I think your best be would be to ask him or her.
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Quote:
These will all be college students and I'm planning to have the parents as co-applicants.
I was also thinking in addition to the lease agreement, I would need some sort of basic information/fact sheet. Kind of like an application?
I have them put it on the lease that they sign and I keep so it's all in one place. Home address/phone number/emergency contact info/license plate number (if they have a car)/social security #/ email/ cell phone #.
I take all the info for each tenant, make my own list for each property & unit and keep it in a file on my desk.
Quote:
Right now it will be all "friends" and people she and her roommates pre-approve as roommates. (I know, I know)
Therefore I don't think an "application" is the right thing necessarily as it won't be a consideration in being a renter. I was thinking "fact sheet" and "lease agreement" (with parent co-signing)
I hope you don't have any issues. Don't let your daughter be the fall guy, you be the "meanie" when any issues arise and treat your daughter like a tenant. It will make her life easier.
Stay away from parents co-signing the lease because that will mean that you CAN answer to them. It's much, much easier to deal with the tenants directly if an issue arises than an irate parent who is upset that the hallway didn't get painted on the day you said it would because your contractor got delayed at another job b/c HIS client wanted to change the paint color for the 5th time.
Quote:
On a side note: Each person will have their own lease agreement. At least that is my plan unless someone has other ideas or maybe specifics on how those should be set up.
Absolutely do NOT do this. One house, one lease. You might not even legally be able to depending on zoning laws. It could be construed as a rooming/boarding house and you might need to be licensed for that. Check with the local municipal laws.
Besides that, why go through the headache of 5 separate security deposits & rent checks? What if one tenant wants to leave early? You'll be out the rent unless your daughter finds a substitute, and that's not always easy to do in the middle of a semester. One lease, one check...all tenants will be responsible for the rent in full if someone flakes out.
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Quote:
3. Rent amount: Does this sound fair/correct?
The house we purchased is a single family home. Generally, if rented as a single family home in this area it would probably go for $700-800/month.
With renters (college students) I would anticipate our rents to be anywhere from $1,500-$1,625/month. Rent around $300-325/person.
There are 5 BR's and 2 baths. The tenants are responsible for all utilities.
We might be willing to let them have more than 5 tenants as the BR's are good size but I'm not sure if any break should be given on rent if they do double up. Maybe $50 off for sharing a room? There might even be a possibility of adding a 6th BR in the basement down the road. It wouldn't be hard with this house.
Does that seem fair/sound correct?
You need to know the square footage of every room in the house that is considered common space and the bedrooms.
You could have 5 decent sized bedrooms, but undersized "common space" (or "living space or "habitable space") and only so much off-street parking, so you may not be able to rent to more than 5.
I don't know where your rental in Iowa is, but here is an example of the restrictions in Ames:
Quote:
Living Space - Areas in a dwelling unit that are livable space. This does not include closets, crawl spaces, and other storage areas.
(1) Every unit must provide living space totaling at least 80 square-feet for the first occupant and 60 square-feet for each additional occupant.
What you need to do is find out the municipal codes for where your rental is and have your rental inspected by a town/city fire inspector, which you might be required to do before you can rent it out any way.
You might also need to fill out and provide info to the town/city for your rental. Again, I don't know where in Iowa your rental is, but here is an example:
With all the extra wear and tear that a house will get with college students I see no reason not to be able to charge more total money. Based on what other LL's are charging in the area, it is definitely a bit higher. However, this house is in much better shape than any of the other college houses we've seen. Has more living space, larger BR/s as well as a nice laundry area in the basement. Plenty of parking, a nice fenced in back yard and good storage space.
Sounds great! But get it checked out so you are not in violation of any municipal or state laws/ordinances/codes. What works for a "family" in the eyes of the muni-codes, doesn't necessarily work for "dwellers" in a rental property - even if it's the same house/unit.
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Quote:
4. Organization: tips/tricks etc.
I would love to hear any and all ways you keep your rental business organized. From office organization to file creation and upkeep for a tenant to rent collection/records keeping etc. and beyond.
I am currently thinking everything will be paperless (scanned in) and kept in a computer file organized by tenant.
Any tips or tricks of the trade would be appreciated.
Make it easy for yourself. First would be to not have individual leases, and only one spokesperson for the group and to take only ONE rent check. Let them figure out who it is and all tenants have to get their rent check to her. I understand your daughter is going to be living there, but set yourself up for the future, and learn NOW as opposed to later when she graduates and you're still renting the place out to students.
You don't need property management software quite yet. Keep a file folder for the lease, the security deposit info & statements, inspection certificates, the tenants personal contact info, copies of bills that you pay, copies of bills the tenants pay to you (I have to pay the water bill, not allowed to have it in a tenants name)...you'll figure out what you need to do as you get in to it. If you want to keep it all computerized because that's easier for you, make sure you back your files up and keep paper copies.
Best of luck to you!
Last edited by Informed Info; 03-06-2014 at 09:00 PM..
Thanks so far for the great responses. I will try to research all of this and I'm sure I'll have some more questions.
First one:
Keys:
There are 2 doors. Front and back. I'm thinking about putting in key pad type locks so that we don't have to change out locks and keys when someone moves out. We then just need to change the combinations.
Has anyone else done this method? If so, how did it work for you? I suppose I could go the old fashioned key method and spend $10 on taking the cylinders into the locksmith each time.
If someone has experience with a certain brand or kind of system, that would be swell.....
I know this is something to tiptoe around in public so I would love to have a private message discussion on this. but what are some of the creative ways people are dealing with renters if they "decide" to pay you cash.....
Absolutely do NOT do this. One house, one lease. You might not even legally be able to depending on zoning laws. It could be construed as a rooming/boarding house and you might need to be licensed for that. Check with the local municipal laws.
Besides that, why go through the headache of 5 separate security deposits & rent checks? What if one tenant wants to leave early? You'll be out the rent unless your daughter finds a substitute, and that's not always easy to do in the middle of a semester. One lease, one check...all tenants will be responsible for the rent in full if someone flakes out.
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Make it easy for yourself. First would be to not have individual leases, and only one spokesperson for the group and to take only ONE rent check. Let them figure out who it is and all tenants have to get their rent check to her. I understand your daughter is going to be living there, but set yourself up for the future, and learn NOW as opposed to later when she graduates and you're still renting the place out to students.
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A couple items come to mind regarding thoughts on the lease being per group or per person and I welcome further discussion on this from sawdust or anyone else.
some of this is thinking out loud and I apologize if some of it seems obvious to some of you. I do tend to over think things some times but it helps me to ensure i know all of the ins and outs.
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1. Rent collections
I think some of the students will want to pay for the semester up front when they get their student loan check. In fact, I'm going to encourage that!
See any issues here since, the way sawdust recommends it, they are supposed to present me with one check each month for the grand total of the rent amount?
I suppose I would let the group know that she paid her 5 months in advance and that they would just subtract that persons amount from their monthly total.
Probably over thinking this but I'm just trying to sort through the mechanics of this in advance.
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2. More Lease questions
I am a bit confused how it works when people come and go as renters if we are using 1 lease and not individual leases for each person.
Do we just add and remove names to the lease as they come and go?
I would think that we would have to do it that way.
So if I understand this, there would be 1 lease with 5 names on it and those 5 names could change as people move in and out.
I'm not sure how this would physically work. Would I have to have to get all 5 signatures each time there is a new person since the document would have 5 people on it? Or is there an addendum?
A bit confused on this.
With that being said, I know of a property management company that makes each college student sign an individual lease, collects rent separately but will allow "re-letting". Not sub-leasing. To let someone out of their lease mid-way as long as the land lord approves of the new tenant and receives new lease agreement/deposit etc from the new tenant.
Curious on thoughts about this.
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3. More on deposits:
So if we are doing 1 lease; upon the start of this, I'll obtain deposits for all 5 renters (actually just 4 as my daughters won't need to be physically collected by me, just added into the total)
So if the deposit is $300/person and there are 4 renters + my daughter, I would collect and deposit $1,200 in deposits but $1,500 is the total amount of the deposit credited.
Then someday when daughter is out of the picture I'll actually have $1,500 in deposits when a person replaces her. (and that person gives her $300 and she gives it to me!)
Then when renters come and go it will be the responsibility of the person moving out to obtain the deposit from the new person and leave me out of it?
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I think it definitely sounds like a bit more work to have individual leases, deposits and separate rent checks each month but I just can't decide which would work better for me.
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