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Stuff Nobody Tells You About Getting An Apartment

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There is some good info in here. A good read for anyone getting ready to look for their first apartment.

 

STUFF NOBODY TELLS YOU ABOUT GETTING AN APARTMENT

This’ll cover the basics, such as financial expectation, rental history, what to bring for the application process, etc.

This information is based on renting in an apartment owned/managed by a commercial property owner in the USA. That being said, much of this can be applied to any first-time renter.

FIRST PLACE?: Don’t sweat it. What’s likely is you’ll have a higher deposit, or need lots of references, or have a longer lease. You may have to deal with being rejected because they assume with you being young that you’re not mature, or that you tend to party. This is a stereotype that, unfortunately, you can’t really fight. Keep looking, don’t give up. Come prepared with reference letters from employers, non-family friends you’ve known at least a year, volunteer mentors. This will make you look awesome.

If you can get out on your own without any hitches, you should do it. If you’re in the process of getting booted out by family because they don’t want to support you anymore, or you’ve had enough and are deciding to save up the smallest amount possible to get out fast (see “how much should I save?”), as long as you follow the rest of the steps below, all should be well.

Sometimes (not always; just sometimes) when you live in an area where the rent is just not in your price range at all and you don’t want to move away from a place you know, it helps to have a friend who’s been apartment renting a while and becoming roommates. You essentially ride in on their rental history and in doing so, you build up some cred yourself. Plus, then you have not only your future manager’s reference, but a personal/roommate reference. Everyone should have a couple roommates in their life, so they can figure out how to co-habitate. Family doesn’t count, and be careful housing with close friends because it might test your friendship. You might be saying “Oh, no! We’re best friends! If I can’t live with my best friend—” but trust me: long-term friendships have ended because of roommate situations. After doing this, then you can live completely on your own. Keep in mind with regard to moving in with someone who is already in an apartment: you need to be put on the lease. Some properties have very strict rules regarding this — it’s called subletting, and it can put you in major trouble down the line.

If you don’t have a credit card, consider getting one. Buy little things on credit you know you can afford; pay them off within the first two weeks of purchasing them. What this does is increase your credit score, which looks good on your background check. Do this early and often, and you’ll look awesome. Don’t trust credit cards? Check if your bank will let you take out a personal loan. Make it smallish, ranging $350-$500. Go on a mini-vacation, or buy yourself a video game console, or a couple new outfits that are in fashion. Pay it back monthly in double the minimum payment, and pay on time. Having credit is essential if you want an apartment. Also, having this little cache of… cash… will help you with your moving costs.

Read the rest here.

 

After the Fire A Landlord’s Guide – The Insurance Adjuster

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I had a major fire in one of my properties not too long ago. After getting the fire put out and taking care of the tenants I filed an insurance claim. I had to. My property was severely damaged and uninhabitable. Upon filing a claim, the first thing any insurance company does is send in an adjuster. The adjuster for my insurance company came out very quickly. He was there, inspecting my property just two days after the fire occurred.

As I wrote last time, he spent about two hours going through my property, looking over the damage, taking pictures and making notes. His job was basically the same of any real estate investor, and that was to estimate the cost of the repairs. How much was it going to take to put the property back to the condition it was in before the fire? I already had a rough estimate in my head, and now I had to wait to see if my estimate was close to his. I hoped it was. For if it was not, I was going to have a hard time getting my property back up and running.

Remember that insurance companies are in the business to make money. They do this by charging premiums and denying claims. So I must say that having the adjuster out looking over everything and then waiting for his report was a bit worrisome. What if he missed something? What if his estimates were low? What if he was just plain dishonest? Any of this and more could reduce the amount paid for my claim and thus make any future plans I had for the property much more difficult. I was, for now, in his hands.

In my estimation, and in terms of my insurance policy, the property was a total loss. That term “total loss” does not however mean perhaps what you think it does. The building was not totally destroyed. Not everything was totally lost and in fact large parts of the structure were able to be reused. In insurance terms, “total loss” means something a little bit different. “Total loss” in insurance terms relates to the dollar amount you have a property insured for. If the cost to repair the damage to a property is at or above the insurance amount, then the property is a total loss and the insurance company will pay out the full amount the property was insured for. Anything less is obviously not a total loss.

Would the adjuster agree with me that the property was a total loss? I was cautiously hopeful as I waited for him to make his report. That process would take about a week.

In the meantime, I found out that there happens to be an entire industry out there that contests adjusters and insurance companies in the hopes of settling your claim for a higher amount. In a purely coincidental occurrence, I happened to have lunch with just such a person. Imagine that. I just filed a major claim and then I happen to have lunch with someone who fights insurance companies over major claims. He was optimistic about my claim and actually took a look at my property. He gave me his card and told me to call him if I needed his services.

Would I need them? Stay tuned.

 

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What Did This Landlord Do Wrong?

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So what did this landlord do wrong?

 

 

Let’s start a list.

  1. Did not use a pet agreement
  2. Did not just say, “I’m not renewing your lease.”
  3. Told everyone who is behind the trust
  4. Spoke to the press
  5. Got a bit greedy perhaps?
  6. Created a victim
  7. Got entwined in a lawsuit

What else?

How could they have handled things a little better?  I’ll share some thoughts later on.  Meanwhile let me know what you think with your comments.

My Tenant Said What?!?

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Can what your current tenants say to potential tenants cause trouble? You bet it can. In this recent news story from New York one of an apartment owner’s tenants (who was also his son-in-law) answered the door for a prospective tenant. Upon seeing that his potential future neighbor was pregnant he allegedly said “no babies” and shut the door.   That is a big no no as familial status is a protected class. Landlords cannot discriminate against children, even unborn ones.

The landlord was fined $5,000, but appealed. The NY Supreme Court eventually reversed the fine because it stated that the son-in-law was not acting under the authority of the landlord. Apparently he was just stating his own opinion and had no part in the tenant screening and approval process.

If you ask me, this landlord was lucky to get out of the fine, but I’m sure his lawyer was not cheap and the stress was not pleasant either. I hope he gave his son-in-law a slap upside his head.

So, what can you as a landlord do to avoid such a situation? One, do not let tenants act under your authority. Just asking a tenant to “show this apartment” because you do not have time could be asking for trouble. You never know what they might say or do. Two, emphasize in your literature, on your website and to all of your tenants that you do not discriminate against the protected classes. Hopefully the word will sink in.

But what if there is a chance encounter with an existing tenant who says something stupid? What then? Unfortunately it could lead to a lawsuit as anyone can sue anyone else in this country. However, it seems that the courts will side with you if your tenant was acting alone. Proving that however may be a bit expensive and time consuming.

After the Fire A Landlord’s Guide – Making the Insurance Claim

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I have been writing recently about a major fire that occurred at one of my properties recently. I wrote about the initial incident, surveying the damage on the day after and dealing with the tenants. In this post I want to talk about beginning the process to rebuild the property. Specifically, beginning the insurance claims process and dealing with the insurance company.

First let me say that I normally do not make insurance claims. My belief is that insurance is there only for a catastrophe, not for minor problems such as a defective heating system of roof leak. This fire was of course a major catastrophe, so placing a claim with my insurance company was in order.

Before starting the claim process there are several things that smarter landlords should do and think about before getting things rolling.

  1. Be completely honest about what you know when talking with your insurance company. Don’t try to inflate the damage or increase the claim.
  2. Call your insurance agent first and ask their advice instead of calling the general 1-800 number. Your agent can provide you with valuable advice and contacts within the company that may make the claims process much easier. They may also be able to get the claims process going faster by calling it in themselves.
  3. Remember that insurance companies are for profit companies. They make money by collecting premiums and denying claims. Understand that they are going to conduct an investigation into what happened and what you are claiming. So think carefully about what you are saying at all times when speaking with your insurance company.
  4. Call a trusted attorney and discuss your claim with them as well. Ask for advice on dealing with the insurance company and starting your claim. An attorney can be very helpful through this process, especially if things start to head south.
  5. Start a journal of your fire event. In this journal keep a record of all contacts, discussions, etc. Trust me, this will come in handy later.

I called my insurance agent the very next day after the fire. Through my agent, I got a number for the claims department and made the call. They were very responsive and professional. They gave me a claims number and said an adjuster would contact me shortly.

The adjuster called me the next day and set up an appointment to view my property’s damage the day after that. The process was moving very quickly which both surprised me and made me happy. I was surprised the insurance company would move that fast and of course happy that they were.

So what is the purpose of the adjuster? Their job is to estimate the amount of the damage and determine what it would cost to repair, replace and fix the damage. They will take measurements, take pictures and in general examine every detail of the damage and make a report back to the insurance company.

You should always meet the adjuster at the property and go through it with them. Pay attention to what they do and say. Take notes. Be sure to point out how expensive replacement materials will be. Make sure they note that floors are hardwood instead of carpet, tile instead of vinyl, that the counters were granite rather than Formica and so and so on. Remember, you want to get what you are due to rebuild and restore your property. Remember also that the insurance company will be trying to save money. So you need to stay on top of them and make sure that they record accurate information.

Overall the adjuster spent about two hours going through and examining my property. He stated that he would need a couple of days to finalize his report and he would be in touch then. Until he finished his job, there was really nothing I could do other than keep the property secure and begin to think about rebuilding. It was time to start getting estimates.

Next time, I’ll write about what the adjuster reported and how the insurance company settled my claim. Was I in “good hands” as they say? Stay tuned.

 

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Sure, I’m The Laywer

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Some tenants will go to almost any extreme, and even get very creative, to avoid paying rent.

This one though, is a first for me. Now I have another thing to add to my eviction checklist. Make sure the paperwork is actually filed by my lawyer.

Do You Search Your Applicant’s Social Media?

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Do you check your applicants on social media sites to see what they have been up too?

Perhaps you should.

Remember that one of the most important things you do as a landlord is find tenants who will pay, stay and take care of your property. And sometimes you need just a bit more than a criminal and work history background check to do that. Especially if a potential red flag begins to wave. Searching an applicant’s social media can help determine if those red flags are genuine concerns.

Here is an example. Suppose you have an otherwise decent applicant who claims to have been unfairly treated by a previous landlord that has dinged her rental history. You applicant claims the landlord never made necessary repairs so she moved out. The landlord claims the applicant failed to pay the rent on the last month of her lease and just left in the middle of the night. Who to believe? Both sides to the story have been known to happen.

You decide to Google your applicant’s name. Her Facebook account pops up and you take a look. On her Facebook page are pictures of a beach vacation with comments stating that she was in effect having fun on her landlord’s account. You now know which side is telling the truth.

Here is another example. Perhaps an applicant claims to have only “one small” dog. A quick search however turns up pictures of your applicant with several rather angry looking German shepherds.

The point is you can find out all sorts of things by looking at your applicant’s social media. Just by Googling their name or e-mail address you can get past the “best face façade” and develop an idea of what they are really like. People post all kinds of things. We have seen drug use, criminal activity and just plain sloppiness and stupidity.

On the other hand, not everything posted on social media is bad. Searching social media can reinforce the good things that an applicant states and help you determine that you are likely to have a good tenant. A search can show they have a steady job and steady family life and are just normal folks posting normal things.

If you find searching an applicant’s social media a bit creepy, I honestly have to agree with you a bit. But social media today is a fact of life and everyone has to have the expectation that whatever they post on the interest will not remain private. So, word to the wise, be careful what you post.

Is it legal? Yes, as long as you are not discriminatory and consistent in the way you use it. Just Google everyone and document what you find. There really is no right to privacy when you post something on a public website like Facebook. It is up to the applicant to use the privacy tools found on social media websites to keep things they do not wish to be seen private. Or to simply not post those pics of them doing bong hits at all.

Making a few extra clicks when screening your applicants is definitely worth the effort. Searching social media can really back up or completely destroy what an applicant has told you on your application. You never know what you might find and you just might save yourself from some real headaches.

Do you search social media with your applicants? Let me know with your comments.

Is The Real Estate Bubble (Coming) Back?

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Home prices are up and rents are too. Rents increased about 5% in the 4th quarter of 2015 and about 7% for the year. It is going to be interesting to see where this all ends.

Home Prices Continue To Rise

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The boom is on, but let’s not forget the bust of 2007/2008. It will happen again.

According to EconomicPolicyJournal.com,

“The S&P/Case Shiller composite index of 20 metropolitan areas rose 5.8 percent in November on a year-over-year basis. This is the strongest price gain in 16 months.

Home prices in three U.S. cities, Dallas, Denver and Portland, Oregon, are now at record levels, the survey showed. San Francisco matched its previous peak and Charlotte, North Carolina, is less than 1 percent from its record high.

Home prices are up 11% in Dallas, Denver and Portland, Oregon over the last 12 months.”

h/t to EconomicPolicyJournal.com

After the Fire: Leases and Tenants

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I have been writing about a major fire I recently had at one of my properties. I wrote about the initial shock and finding out the day after that my property was a complete loss and in need of a complete rehab. Most thoughts that next day were focused on getting the property rebuilt and up and running again. But there were tenants that had to be dealt with, and the fire had raised some interesting legal issues.

We had of course signed leases with our tenants. These leases ran for one year. One of the units in the burned tri-plex had just moved out at the end of her lease. There other two were however somewhere in the middle of their leases. They technically still had possession of their units. What where their rights? What where mine? Surly they would move, but what if they did not? Would I have to go through the eviction process to get them out?

Fortunately, the Tennessee Landlord Tenant Act contains a provision for just such an event. Tennessee Code Annotated Section 66-28-517 states in part:

66-28-517.  Termination by landlord for violence or threats to health, safety, or welfare of persons or property.

  (a) A landlord may terminate a rental agreement within three (3) days from the date written notice is received by the tenant if the tenant or any other person on the premises with the tenant’s consent:

(1) Willfully or intentionally commits a violent act;

(2) Behaves in a manner which constitutes or threatens to be a real and present danger to the health, safety or welfare of the life or property of other tenants or persons on the premises; or

(3) Creates a hazardous or unsanitary condition on the property that affects the health, safety or welfare or the life or property of other tenants or persons on the premises.

Since one of my tenants, by throwing a lit cigarette in the trash, had created a “hazardous or unsanitary condition” on the property, I could terminate the leases by posting a written notice, which I did immediately.

That does not mean I went in and started throwing things out. Some tact was required here, after all, some of the tenants were a bit shell shocked and needed to go through and see what they could save. But I was also firm. The place was literally a wreck, dangerous and getting more dangerous every day. They had to move quickly to get what they wanted. Anything they did not want they were free to leave.

Hopefully you will never have to go through such a situation, but if you do be sure you understand your rights and your tenant’s rights. I would bet most state laws have similar provisions to cover similar situations. Check them out and get to know them.

 

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