Do-It-Yourself Landlord's Blog

Ooooh, here’s an interesting development in the world of Tenant background searches, from St. Louis Today's Journals: a proposed database designed to help St. Louis Landlords pinpoint deadbeat or trouble-making Tenants. The article points out that such systems already exist for particular neighborhoods in the Chicago area (but perhaps not in online or database format, maybe more paper/binder based, but it's not specified in the article). A commenter here from Free Landlord Software (NOTHING is free in this world) has mentioned a similar offering through their software, but these systems are only as useful as the data that populates them. You are obviously free to inquire with them as to whether or not they offer something like that for wherever you are currently managing properties.

It sounds fantastic that there might actually be some sort of reliable system out there which could tell whether a potential Tenant has been a problem for any other Landlord, including illegal activity, noise complaints, property damage, and probably even late rent payments. In other words, all the things a Landlord tries to glean from the typical Tenant background checks.

But it would be tailored for Landlords, and available in ONE place. Hm.

Of course, the main push in the article focuses on the fact that Landlords will be liable for willingly renting to any Tenants on the database’s “naughty list�, so to speak. This puts an entirely new spin on the need for thorough due-diligence. If only money is on the line, then a Landlord may be inclined to ignore some obvious red flags, to the detriment of whatever community in which the unit rents.

But if part of the liability related to Tenant behavior rests on the shoulders of Landlords, well, it’s fair to say that communities would likely be tighter, but Landlords would be, quite understandably, increasingly paranoid. We already sweat the civil suits from Tenants (slip-n-fall, tort-exploitation, etc), it might not be advisable to pile on the fear of governmental prosecution.

The number of “Evil Landlords� out there will likely rise exponentially. But will the net result be positive for society as a whole?

Anesia Springborn over at The Landlord Blog has a great write-up on the loss of a long term Tenant (8 years!) who pretty much destroyed the place. It will need an ENTIRE remodel as soon as this Tenant vacates the premises. And of course, they were a month-to-month renter, so 30 days is all she had in order to inspect for, estimate, and conclude what will likely be a complete interior rehab project.

I cannot put enough stress on the need to do periodic inspections of your properties. No need to be overbearing, but a twice-yearly walk-through based on any circumstance available, or simply stated in the lease (unless it violates state law, which I can't imagine that being the case, but one never knows), can do wonders to avoid rehab disasters like these.

This is especially germane to one of my properties because I have a 10+ tenant on a month-to-month who has had some interesting issues during my ownership of the unit. Fortunately those issues afforded me the opportunity to check up on the unit itself. I simply did some cursory peaks at the rooms, while the plumber fixed the toilet or what-have-you, as the Tenant stood watch. No big deal. But it gave me a good basis for figuring out what exactly I’m going to need to save up for once the Tenant chooses to move on.

Most of the issues are the same as they were when I purchased the place, but have understandably deteriorated since then. Bathroom issues, kitchen horrors, ceiling problems, and all sorts of creative landscaping corrections all need to be addressed. Little by little, I am fixing what the Tenant allows, but only because I am able to get in there periodically and check the environment for future hazards that I can head off early (such as the leaky gas stove I replaced a few months back).

Planning ahead, I started a small fund, and have been adding to it ever since I purchased the place, expecting that rehab to hit me like a ton of bricks at any given moment. The lost rent during the rehab process, whenever it occurs? Well, I’m just hoping it won’t take too long. Whatever it is, it’ll just be sunk.

Buying in downtrodden areas, with the intent to renovate and resell has always been the trail marked by flippers. And in most cases, it’s probably best that it stays that way. Long term rental investors and multi-dwelling managers usually get hammered in these areas if they march in, build or repair, and then see the property taxes skyrocket at a speed that far outpaces that of rising rental rates.

They get cash squeezed.

The Crossland Team blog brings up this point in a recent post. The area in question is in Austin, and I’m very familiar with it. I almost purchased property in its center. So I believe I understand all the pieces in play. It's a large section of central Austin that is mere minutes (if not walking distance) to downtown. From an outsider’s point of view, there’s no reason why it took so long to be developed considering how far the city has been built up on all other sides of downtown. But from an insider’s pov, there has ALWAYS been a stigma against that side of the city. “The other side of the tracks,� as it were.

Now, after a few brave investors headed the wave several years ago, investors took notice, started doing their homework, and they want to buy up lots of property fast, for quick high-end development. The frenzied dealing and bidding put upward pressure on property values, and those who have lived there for generations are now taking arms to battle the onslaught of “evil� gentrification. Continue reading "Anti-Gentrification Measures a Potential Boon for Landlords"