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Got a 4+2 1500 sf. in the Glassell Park Los Angeles area to rent for $3K. Good area at the top of the hill. The area is red hot for renters, but everybody answering the ad is so underqualified I might never get it rented. Most everybody is self employed in the craziest kinds of jobs you ever heard of. One was a self-described "private clothes buyer to the stars". Wonder how secure his job is.
Here's part of my ad:
All applicants will have their backgrounds checked. Application fee $50; refunded to successful applicant.
The successful candidate will have
* valid SS number
* AGI of $6000+ (3x's AGI, that's the rule of thumb)
* FICO score of 700+
* verifiable address history for the last 5 years w/
clean rent payment record
* no prior criminal convictions
* no registration in the national sex offender registry
* no prior evictions
* no current/past judgements
* verfiable employment history for last 5 years
* DTI ratio of 35% or below
* security deposit of $6000
Nearly all of this is taken off tenant screening services sample reports so nothing is out of the ordinary. What am I doing wrong? Why aren't I getting quality applicants working around the corner in downtown Los Angeles who are positioned with good jobs?
Property managers cost a lot more than just their monthly fees. They can rob you blind with lots of extra fees and unnecessary maintenance calls. I was ripped off by one many years ago, and my daughter was ripped off by one just a few years ago. It's common, unfortunately.
First, asking for 2 months rent deposit is too much. Yes, it's legal, but if you think about it, anyone with nearly $9,000 in the bank is going to probably be buying instead of renting. Your renovation costs have nothing to do with your customer base. You need to understand your customer base. You can ask for 3X rent in gross income, if you want to also include debt to income, that's acceptable. Asking for the credit score you wanted is okay, too, and the background checks, too.
Asking applicants to give you their personal info without letting them see the apartment, and only putting up an ad with no interior shots, etc., won't work. Think about it. Would you give that info out after seeing your ad? Try to put yourself into the shoes of the people looking to rent your place. Pretend it's you - you've got great income and great credit, so you're probably smart and careful. Are you going to give someone your personal info who has an ad on the internet? Before you can see if you're even interested in it?
The $50 application fee is not legal as mentioned.
I think you can learn how to manage this unit, if you want to. You'll make a lot more money, if you don't turn it over to a PM. Get this book:
It includes contracts and all forms needed in CA. I liked their contract better than the CA Apt Assoc ones. They're simple and easy to read and understand, and you can edit them if you have parking rules or whatever you want to add.
Just put interior shots in the ad, screen them over the phone by just asking them if they meet all of your criteria - go over each one and ask them if they qualify. They will mostly screen themselves out. Some will lie and hope to charm you in person. So be it. After they see the place and want to submit an application, then you get their SS#, etc., and run all their checks.
And only ask for 1 month's rent in security deposit.
And by the way, if you're priced too low, you can actually scare off good tenants. They'll wonder what's wrong with the property.
I managed a 26 unit building in Santa Clara for 8 years. I had a learning curve, just like all managers - although I had some previous experience but not in CA and not for a long time. You can learn how to do this, if you want to, and you'll make a lot more money if you manage it yourself. Good luck.
Most of the places this size in the area already advertise for $32-3700 so my rent is the lowest in the area. The PM's contract says 6% of 1st months rent. That would be $180 but they get to manage the place for a monthly fee @ the same cost.
OMG! That would be a huge chunk of change out of my pocket given the number of applicants who apply in this area. My mistake is that I don't run pics of the interior because the place is a mess while undergoing renovations. Actually lots of people have responded but they balk at giving out their credit score and salary unless they can see the interior, but then that leads to the situation I described in the OP about running up there constantly to show the place to a bunch of unqualified lookie-loos.
50% of the properties in GP don't have yards. They're hillside and this one is too. No yard to allow a dog to runaround in. Also I had a conversation with my insurance co. They will not write a policy that allows dogs in the lease because they're afraid of pit bull liability, especially with all the kids in the area.
Too low asking rent price, asking for personal info without showing/pics of the place, really screams scammer.
I can tell you that the 9k buy in price scares a lot of people away. Combine that with the personal info and too low rent they walk. A few years ago I had to dump 60k in a rental remodel. That was not nor will that ever be a tenants issue as to how much I had to invest in the property. I understand you're trying to protect your investment but you're going about it the wrong way.
A PM can suck dry your profit and then some. Take your gross income on that property and shave off about 20% yearly. They will take one month rent gir finding tenant then another 10% per month to maintain property. So you're losing 6k on that alone.
As the policy for pets. My insurance guy whines about it and tells me that they won't cover attack breeds. I asked to see the section stating that. He hasn't sent anything over.
We rented larger single family homes when we were in southern CA, we were self-employed and I was meticulous about researching each available rental home and making lists with all the details to find the best deal for our family.
I wouldn't dream of giving some stranger our personal info or pay an application fee unless we had seen the property, met the owner and decided we wanted to rent it.
Requiring $9000 a month income for a 1500 sf house seems out of line. 3 x income is understandable, but in southern CA, renters typically pay a higher percentage toward housing.
We also probably would pass on your property if you advertised the $6000 deposit, unless there was some compelling, unique feature about your house that made it more desirable than all the rest.
That's not necessarily true. Many sex offenders cop a plea to register as a sex offender in exchange for no prison time. Depends on how strong the DA thinks his case is. A LL should ALWAYS check the NRSO in addition to a criminal background check. This property has small children all around it.
A plea is the same thing as a conviction. In fact, the judge asks (at least in many states) "you do understand that entering this plea has the same effect as a guilty verdict?" The only difference is a lesser punishment.
Anyhow, I never fill any information out without seeing the place in person. It is commonplace for the landlord to interview ahead of time, and go over requirements, so we don't waste our time, but certainly I won't give that out unless I've set foot in the property. The only people that would are people that don't have any other options. Anyone with $6 or $9K available to them has options.
Property managers cost a lot more than just their monthly fees. They can rob you blind with lots of extra fees and unnecessary maintenance calls. I was ripped off by one many years ago, and my daughter was ripped off by one just a few years ago. It's common, unfortunately.
First, asking for 2 months rent deposit is too much. Yes, it's legal, but if you think about it, anyone with nearly $9,000 in the bank is going to probably be buying instead of renting. Your renovation costs have nothing to do with your customer base. You need to understand your customer base. You can ask for 3X rent in gross income, if you want to also include debt to income, that's acceptable. Asking for the credit score you wanted is okay, too, and the background checks, too.
Asking applicants to give you their personal info without letting them see the apartment, and only putting up an ad with no interior shots, etc., won't work. Think about it. Would you give that info out after seeing your ad? Try to put yourself into the shoes of the people looking to rent your place. Pretend it's you - you've got great income and great credit, so you're probably smart and careful. Are you going to give someone your personal info who has an ad on the internet? Before you can see if you're even interested in it?
The $50 application fee is not legal as mentioned.
I think you can learn how to manage this unit, if you want to. You'll make a lot more money, if you don't turn it over to a PM. Get this book:
It includes contracts and all forms needed in CA. I liked their contract better than the CA Apt Assoc ones. They're simple and easy to read and understand, and you can edit them if you have parking rules or whatever you want to add.
Just put interior shots in the ad, screen them over the phone by just asking them if they meet all of your criteria - go over each one and ask them if they qualify. They will mostly screen themselves out. Some will lie and hope to charm you in person. So be it. After they see the place and want to submit an application, then you get their SS#, etc., and run all their checks.
And only ask for 1 month's rent in security deposit.
And by the way, if you're priced too low, you can actually scare off good tenants. They'll wonder what's wrong with the property.
I managed a 26 unit building in Santa Clara for 8 years. I had a learning curve, just like all managers - although I had some previous experience but not in CA and not for a long time. You can learn how to do this, if you want to, and you'll make a lot more money if you manage it yourself. Good luck.
Yours is a good post, Snow, one with good advice, good points to make and non-combative and non-hostile. Thank you. Let's look at it:
Quote:
Property managers cost a lot more than just their monthly fees. They can rob you blind with lots of extra fees and unnecessary maintenance calls. I was ripped off by one many years ago, and my daughter was ripped off by one just a few years ago. It's common, unfortunately.
You're right. You have to check them out carefully, especially on Yelp and learn how to ferret out the phony 5-star reviews probably planted by friends. I look at the bad reviews first. If there's even 2-3 I likely pass on the company. The one I chose had no 1/2-star reviews and most were very complimentary with pics of the people who posted them so I know they're likely genuine. This company doesn't even insist on holding onto the deposits and rents. I write a check for their monthly service and they turn the rents over to me. They handle everything else. They don't require an account with $10,000 in it, just $200 for emergencies. Anything else they call me immediately.
Quote:
Asking applicants to give you their personal info without letting them see the apartment, and only putting up an ad with no interior shots, etc., won't work. Think about it. Would you give that info out after seeing your ad? Try to put yourself into the shoes of the people looking to rent your place. Pretend it's you - you've got great income and great credit, so you're probably smart and careful. Are you going to give someone your personal info who has an ad on the internet? Before you can see if you're even interested in it?
All I asked for was their FICO and salary. Even the website I posted the ads on allow prospectives to fill out a little profile listing FICO and salary and many members did without hesitation, so I don't think that's asking too much. Hell, I'd tell you my FICO right now, it's 810. And I gave them the floorplan and described it down to the color of paint and what was being done to decorate it. Honestly I was giving as much info as I could w/o actually showing pics of the mess lying all over the floor. But everything else looks brand new. And here's the corker: I was advertising it rent w/ option to buy at very reasonable terms.
Quote:
The $50 application fee is not legal as mentioned.
No doubt the PM gets much better prices because they do business on volume so I'll let them handle it.
Quote:
First, asking for 2 months rent deposit is too much. Yes, it's legal, but if you think about it, anyone with nearly $9,000 in the bank is going to probably be buying instead of renting. Your renovation costs have nothing to do with your customer base. You need to understand your customer base. You can ask for 3X rent in gross income, if you want to also include debt to income, that's acceptable. Asking for the credit score you wanted is okay, too, and the background checks, too.
I think 2X's rent for a deposit is very reasonable. I see it quite a bit in my area because the homes are much more upscale---in the 700K-900K range and thus are at a much higher potential for devastating costs to repair if a tenant trashes the place. If we were talking a 1+1 600 SF in North Hollywood you'd have an excellent point. And anyone trying to buy a home in this area is going to need a hell of a lot more to put down than just 6K. Try 160K down (cannot be borrowed or a loan from family) just to get a bank to even accept their loan app.
Re doing it myself: Nope. Not for me. Too many headaches.
Yours is a good post, Snow, one with good advice, good points to make and non-combative and non-hostile. Thank you. Let's look at it:
You're right. You have to check them out carefully, especially on Yelp and learn how to ferret out the phony 5-star reviews probably planted by friends. I look at the bad reviews first. If there's even 2-3 I likely pass on the company. The one I chose had no 1/2-star reviews and most were very complimentary with pics of the people who posted them so I know they're likely genuine. This company doesn't even insist on holding onto the deposits and rents. I write a check for their monthly service and they turn the rents over to me. They handle everything else. They don't require an account with $10,000 in it, just $200 for emergencies. Anything else they call me immediately.
All I asked for was their FICO and salary. Even the website I posted the ads on allow prospectives to fill out a little profile listing FICO and salary and many members did without hesitation, so I don't think that's asking too much. Hell, I'd tell you my FICO right now, it's 810. And I gave them the floorplan and described it down to the color of paint and what was being done to decorate it. Honestly I was giving as much info as I could w/o actually showing pics of the mess lying all over the floor. But everything else looks brand new. And here's the corker: I was advertising it rent w/ option to buy at very reasonable terms.
No doubt the PM gets much better prices because they do business on volume so I'll let them handle it.
I think 2X's rent for a deposit is very reasonable. I see it quite a bit in my area because the homes are much more upscale---in the 700K-900K range and thus are at a much higher potential for devastating costs to repair if a tenant trashes the place. If we were talking a 1+1 600 SF in North Hollywood you'd have an excellent point. And anyone trying to buy a home in this area is going to need a hell of a lot more to put down than just 6K. Try 160K down (cannot be borrowed or a loan from family) just to get a bank to even accept their loan app.
Re doing it myself: Nope. Not for me. Too many headaches.
Well, if you were right on all these points, it would be rented by now.
And the property manager my daughter used also had no bad reviews online, even though they were thieves and have been in business for 30 years. All we can figure is that they pay for an online reputation scrubbing service.
Too low asking rent price, asking for personal info without showing/pics of the place, really screams scammer.
I can tell you that the 9k buy in price scares a lot of people away. Combine that with the personal info and too low rent they walk. A few years ago I had to dump 60k in a rental remodel. That was not nor will that ever be a tenants issue as to how much I had to invest in the property. I understand you're trying to protect your investment but you're going about it the wrong way.
A PM can suck dry your profit and then some. Take your gross income on that property and shave off about 20% yearly. They will take one month rent gir finding tenant then another 10% per month to maintain property. So you're losing 6k on that alone.
As the policy for pets. My insurance guy whines about it and tells me that they won't cover attack breeds. I asked to see the section stating that. He hasn't sent anything over.
So...several interesting points in electrician and kara's posts I'd like to address:
The rent price cannot be too low. It is already lowest in the area. And when the rent is too low it attracts undesirable tenants. I could rent the place for $500 but what kind of bums would I attract?
Again, the info I asked for is standard stuff...just a FICO and a salary. I'm not asking for their SS, their place of work, their bank account numbers, etc. No one should be afraid of giving up their FICO when all parties are anonymous.
The PM is a good company. They go out of their way to please and don't charge me for little extras. They didn't ask for any more than $200 to cover emergency plumbing repair. They have no access to my funds.
Pets...eh! Couldn't care less. The ad states "NO PETS, ESPECIALLY DOGS, ESPECIALLY ESPECIALLY PIT BULLS!!!" If the applicants don't like it they can lump it and go elsewhere. The property has no yard.
Losing money aspect: the house has been vacant for 8 years. I was too lazy to clean it up because I had 700K in the bank from a previous sale. Now it's down to 550K and my elderly mom who is in good health might have an emergency medical and then I'll need the income so that's why I'm doing it now. Fixing up this place is killing me with petty details. Now I need to install a water heater, two new toilets and get the sewer line rootered, not to mention a new roof, new flooring, new screens on the sliders, scrape/paint on the outside wood trim, new gutters and a dozen more things. Try wasting days on end on the phone just trying to find a reliable plumber who can do all the plumbing issues without asking for $500 upfront just to give me the privilege of presenting a $5,000 estimate for the work and then keeping my $500 deposit when I tell them, "Go to hell!"
Quote:
Originally Posted by KaraG
We rented larger single family homes when we were in southern CA, we were self-employed and I was meticulous about researching each available rental home and making lists with all the details to find the best deal for our family.
I wouldn't dream of giving some stranger our personal info or pay an application fee unless we had seen the property, met the owner and decided we wanted to rent it.
Requiring $9000 a month income for a 1500 sf house seems out of line. 3 x income is understandable, but in southern CA, renters typically pay a higher percentage toward housing.
We also probably would pass on your property if you advertised the $6000 deposit, unless there was some compelling, unique feature about your house that made it more desirable than all the rest.
I just don't like self-employed. They're too unreliable. 80% of self-employed's are unemployed within a year. If you're one of the exceptions, congrats.
Again, again, I'm only asking for FICO and salary. The only people who would scream, "You're not getting my FICO and salary until I see the place" are people with a minus 500 FICO and a 20K annual salary who just want to kill time walking through places on weekends and pipe dream. There are people who make it a full time weekend activity calling and asking to view homes they cannot afford. I know because I've done it myself. I'm a hypocrite, I know.
Again, 6K for a deposit is not unheard of in this area. The properties are 600K-1 million market value that are renting. A bad tenant can inflict a lot of damage to a property and 3K wouldn't fix torn screens with the cost of repairs nowadays.
Maybe once all of the renovations are done you will have better luck. Especially if the other rentals in your area are move in ready and you're not.
Maybe. I'll never get it rented at this rate though.
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This property has small children all around it. 
