Archive for May, 2015

Tenant Rental Agreements and Landlord Rental Leases Accurate Credit Bureau

Both rental leases and rental agreements are legally enforceable agreements that establish the terms of your tenancy. They both cover basic issues such as the amount of rent, security deposits, and who can live in the rental unit. The primary difference between the two types of agreements is the length of the tenancy.

Before you get into the nuts and bolts of leases and rental agreements, it’s important that you understand the meaning of the word “term.” When you read a lease, rental agreement, or any other kind of contract, you’ll come across the word “term” used in two ways:

As a synonym for “rule” or “condition.” For example, you may see a sentence in a rental clause that reads: “The terms of the lease include $800 monthly rent, no pets, and a duty upon the tenant to shovel the sidewalk when it snows.” This means that you must pay this rent, not have a pet, and shovel that snow. If you don’t do these things, you will have broken (lawyers say “breached”) the agreement, and the landlord may be entitled to send you a termination notice.

As a way to describe the length (years or months) of the agreement. For example, a clause may say: “The term of the lease is one year.” This means that you must pay rent and abide by other rental rules for one year (and you get to live there for that length of time). 

Rental Agreements

A rental agreement establishes a tenancy for a short period of time, usually one month. A month-to-month rental agreement automatically renews each month unless you or your landlord gives the other the proper amount of notice (typically 30 days) to end the agreement. A landlord can change the terms of a rental agreement—for example, increase the rent (unless there’s rent control)—with proper written notice. In most states, this amount of notice is also 30 days.
Leases

A lease obligates both you and the landlord for a set period of time, usually a year. Your landlord can’t raise the rent or change other terms until the lease ends. And your landlord can’t force you to move out unless you breach an important term of the lease such as failing to pay the rent, or violate nuisance or other property laws by repeatedly making too much noise or damaging the rental unit. A landlord can’t kick you out simply because he feels like it or is annoyed with you because you complain too much about repairs or noisy neighbors.

At the end of the lease term, you or your landlord may decline to renew it or may negotiate to sign a new lease with the same or different terms. (Landlords subject to rent control, however, often have less flexibility when it comes to deciding not to renew a lease.) Often, especially when the landlord and tenant are content with the arrangement, nobody does anything formal and the tenant stays and continues to pay rent. When this happens, in most states the tenancy will continue on a month-to-month basis, subject to the same terms and conditions, in effect converting the lease to a rental agreement. For more information see Accurate Credit Bureau.

Landlord Services Tenant Screening Accurate Credit Bureau

Accurate Credit Bureau provides online educational tools and resources for small landlords, property managers, and real estate agents. It offers tenant screening, background checks, eviction reports, educational articles about land-lording; practical tips and recommendations on resources, tools, and software; and information on federal and state rental laws. The company was founded in 2000 and is based in Bastrop, Texas.

Landlord Property Decisions Landlord Tips Accurate Credit Bureau

1. Buy at the right price

A bargain now will help you to better withstand fluctuations in property value over time so you can profit if and when you eventually sell. Whether working with a realtor or solo, you need to develop a deep understanding of what constitutes a “value” price in the neighborhood(s) you’re looking at. As an investor, you can keep making low-ball offers and wait for the deal you want, but great bargains generally get snapped up, so you need to be able to act quickly once your target’s in sight.
You also need to benchmark rental prices for comparable units in the area, getting a feel for demand. The local classifieds are a great starting point for this, and a few hours of research should give you a good basis for determining what you can charge. Just make sure to factor in for utilities (electric, gas, oil, water, sewer, cable, etc.) if they’re included.
Depending on your personal goals, there may not be enough of a spread between what you will pay out monthly in mortgage, taxes, and utilities and what you can charge. Figure out what your spread needs to be, and analyze every house you consider against this amount. My rule of thumb, since I’m looking to make a yearly profit without much additional out-of-pocket investment beyond the down payment, is that there needs to be at least a $500 difference per month between income and costs.
Of course, a bigger spread is preferable, as it means more profit. If you’ve got a few good options to consider, the spread can aid in your decision-making.

2. Find the right neighborhood

Rental properties don’t always make good neighbors, but there are a few tricks to making it work. Overall, it’s important to find a community where your rental property will have a good chance of being accepted, and the ritziest corner of town may not be it. On the other hand, it’s hard to find and keep good tenants in bad areas, where crime rates may be higher.
We have had the best luck with solid working-class neighborhoods, generally middle to lower income areas where tradesmen and even some businesses might reside, intermingled with the houses. One can often tell these neighborhoods by the work vans and trucks parked in the driveways. Not only do the residents understand the value of hard work, they appreciate the effort we invest in rehabilitating and improving my properties. Your presence in the neighborhood should help to make it a better place.
Regardless of what neighborhood you choose, you never want your property to be the worst-looking one on the street, or complaints and possibly citations may follow. If you choose a property which visibly needs maintenance, you should budget to correct these issues within the first year, and ideally prior to renting it at all. This helps to show the township or city officials that you’re one of the good landlords, committed to keeping your property up, and can make a huge difference in your experiences over the life of the property.
Each property you own serves as a reference to your work, abilities, and commitment.

3. Be aware of local rental regulations

In many locales, rental properties are treated more like businesses than residences, and while 8×10 might constitute a proper bedroom in your personal home, it likely won’t be considered such for a rental property. In one local township where we presently own three properties, there are minimum ceiling heights (7′) and square footage (100 sq. ft.) for bedrooms, substantially different from what is required for residential homes. Occupancy is calculated by the township based on the square footage of the unit, so what the local realtor touts as a four bedroom home may only legitimately be a two bedroom home if rented.
Township-enforced renovations can be a massive expense; in fact, we personally know someone who paid nearly $50,000 to get two basement bedrooms and a bathroom upgraded to meet this code. He’d bought the house with a “finished basement” which the previous owners had completed without a permit. Because rental properties are treated as businesses, he was not allowed to do the work himself but had to hire an architect to draw and seal the plans, then licensed plumbers, electricians, and building contractors to do the work.
It is a safe assumption that you’ll need to bring your property into accordance with local rental regulations prior to your earning any income from the property. Knowing the issues, you can budget accordingly.

4. Ensure proper parking is available

In one local township, parking requirements for rental and residential real estate differ substantially. While almost anything goes for residential homes, for rentals, one paved off-street parking space is required for all tenants old enough to hold a driver’s license, whether or not they actually have a license or own a car. A house rented to a family of two fiftysomething adults, an 18 year old son and 20 year old daughter would require 4 parking spaces.
Other jurisdictions may institute a flat, per-property parking space requirement or even a sliding scale based on square footage. More and more municipalities are passing such regulations, which are often conditions for licensure. Landlords are being forced to either retrofit their properties to meet the new requirements or throw in the towel and sell, as some lots lack the space to provide sufficient paved parking.
Besides meeting existing regulations, off-street parking is desirable for landlords seeking quality tenants in areas where cars are de rigeur. People who care about their cars don’t like to park them on the street, so offering a protected parking spot can help you to attract better tenants.

5. Look for simple construction

That Victorian home you’ve been ogling may feature lovely leaded glass windows, but you’ll never find a suitable replacement at the local home improvement store. A slate roof is a beautiful thing to behold, but can be terribly expensive to repair. And if the roof’s very steep, costs could go up even further. A house which has simple, solid construction, where everything’s easy to access and uses relatively standard materials, is generally the easiest and most inexpensive to maintain.
As some building contractors will tell you, the shape of your structure provides a general measure of its complexity. Count the corners of your building. Four-corner buildings are often simplest to maintain and add on to, and it goes up from there.
When examining a potential investment property, consider ease of access to the heating, cooling, plumbing, and electrical systems. A panel or wall behind the shower allows quick access to plumbing in case of a problem, whereas if that shower backs up to another bathroom, you might be looking at removing a whole tiled wall.
Complicated landscaping may be expensive to maintain as well; I look for properties with a simple, small lawn, nice manageable planting bed, and ideally a large rock garden or patio. Less maintenance for your tenants and for you.

6. Beware of houses built on a cement slab

Not having a basement can cost you much more than storage space.
In some places, like parts of Florida and Texas, all houses are slab construction, so real estate investors have no other options. Even then, it’s important to understand the issues with this type of construction, as it can have major financial impact over time.
Generally, in such structures, ductwork, heating pipes, plumbing and electric lines can all be buried in or beneath the slab. If your plumbing pipes are set beneath the cement, to fix a simple leak you may end up jackhammering out the floor. Moisture and drainage issues are exacerbated in structures which are built on a slab. I’ve seen a number of slab homes which are set low to the ground, making flooding more possible and more damaging in areas without proper grading and drainage.
And any time you have a slab home, you’re looking at less living space because you may lose a room to utilities such as the furnace and water heater. It’s a safety violation to house these items within the bedrooms, so they’ll need a room or walled space all their own.

7. Look out for safety issues

An excellent value for the money, a licensed home inspector can help to identify potential safety and maintenance issues and even provide ballpark estimates for correcting these. I would personally never purchase an investment property without consulting one, as too many potential dangers lurk within and behind the walls which can turn your House Beautiful into The Money Pit.
Radon, lead paint, asbestos and mold are four primary concerns, as they pose significant health risks and can be expensive problems, requiring specialists to remediate. My insurance company will not even insure a property which it believes to have lead paint, and I’ve been hearing reports lately about local code officials doing tests which penetrate the top layers of paint to reveal any presence of lead below.
As a landlord, there are certain things you need to pay special attention to in order to prevent potential lawsuits. These include:
Exterior stairways without handrails or where ice/snow/rain may cause a slip hazard
Steep steps
CO and smoke detectors (fire hazard)
Obstructed doorways or exits (fire hazard)
Broken windows/glass
Cracks or unevenness in sidewalks, driveways, or walkways (trip hazard)
Open electrical circuits, outlets or wires (electrocution hazard)
Unfenced swimming pools (drowning hazard)
Lack of GFI outlets near kitchen/bathroom water facilities (electrocution hazard)
As a rental property owner, you have an increased risk of lawsuits overall, so safety is a primary concern, but accidents still happen. Owners often choose to limit their personal liability risk by establishing each property as its own LLC. It is advisable to consult a lawyer to ensure that your other assets will be protected in the event of a lawsuit.

8. Stay close to home

Absentee landlords tend to find out about and resolve problems less quickly, which in turn can make them bigger, more expensive problems. Municipalities are none too fond of absentee landlords, which can also lead to bigger, more expensive problems, like fines and even citations.
Twenty minutes or less is an ideal distance; it allows you to appear involved and available to your tenants and local officials, be a visible part of the community, and respond rapidly when help is needed.
One unfortunate landlord we know attempted to hold down a busy job in Manhattan and found a startup company while managing several properties over an hour away in New Jersey. He invested a chunk of money to fix up his properties, and everything seemed fine until a minor plumbing problem occurred in one of the houses. It was an easy fix involving a five dollar part, but this landlord was late to respond. He didn’t have much luck with the local plumbers he reached out to, and more time passed. One day a plumber finally called back after visiting the house and angrily exclaimed that he patently refused to work under those conditions.
What conditions, you ask? In a house of eight tenants, raw sewage had been pouring into the basement for over two months. The muck was knee-deep, the stench was abominable, and yet the tenants, college students, had never said a word. The house was in foreclosure within the year.

9. Bigger is not always better

As your property size and square footage help to determine your tax rate, an acre or more of land really isn’t necessary. You’ll mow it (or pay to mow it) and pay extra taxes for it, but beyond increasing overall property value, it won’t do much as far as rental income goes unless you have plans to build an addition or another rentable structure on the lot.
Neither will room size. As long as you meet the minimum bedroom requirements required by the township or city, more square footage per room doesn’t necessarily help. 4 small- to medium-sized bedrooms may actually produce better income than 3 large bedrooms.
One of our rental properties featured a lovely but immense bar in its finished basement, which we immediately earmarked for removal. The small extra initial cost has paid off in the long run, especially when we decided to rent to college students. If our goal was to flip the house, we might have left it, but for our intended use it was more of a liability.

10. Utilities can use you up
Utilities can be a major issue for landlords if not set up properly. If you supply utilities to your tenants, you are generally not permitted to terminate these for nonpayment or other issues, and penalties can be severe.
Want to keep the bills in your name but have the tenants pay their portion to you? The law does not generally allow you to collect if they default on these sums, so you may risk losing out if the tenant stops paying their portion of the utility. Plus, you are still required to furnish them with these utilities, even if they fail to pay. Unless you can incorporate a flat fee into the monthly rent figure which covers your expenses even as costs continue to rise, it is best to insist that tenants pay utilities directly, under their own names. Then, in the event of default, you are not responsible.
This means that properties containing two or more rental units need to have split utilities; separate furnace, hot water heater, meters, etc. It is much easier and cheaper to purchase an already-split property than to try to do this yourself, so this is an important factor when you are looking at multiple-unit properties. Duplicate systems will mean more maintenance costs over time, however.
– See more at: Accurate Credit Bureau

Employee Screening Background Checks Accurate Credit Bureau

Background checks are often requested by employers on job candidates for employment screening, especially on candidates seeking a position that requires high security or a position of trust, such as in a school, hospital, financial institution, airport, and government. Accurate Credit Bureau has several pre-employment screening packages available for employers. Results of a background check typically include past employment verification, credit history, and criminal history.

These checks are often used by employers as a means of judging a job candidate’s past mistakes, character, and fitness, and to identify potential hiring risks for safety and security reasons. Background checks are also used to thoroughly investigate potential government employees in order to be given a security clearance.

Checks are frequently conducted to confirm information found on an employment application or résumé/curriculum vitae. One study showed that half of all reference checks done on prospective employees differed between what the job applicant provided and what the source reported.They may also be conducted as a way to further differentiate potential employees and pick the one the employer feels is best suited for the position. Employers have an obligation to make sure their work environment is safe for all employees and helps prevent other employment problems in the workplace.

In the United States, the Brady Bill requires criminal checks for those wishing to purchase handguns from licensed firearms dealers. Restricted firearms (like machine guns), suppressors, explosives or large quantities of precursor chemicals, and concealed weapons permits also require criminal checks.

Checks are also required for those working in positions with special security concerns, such as trucking, ports of entry, and airports (including airline transportation). Other laws exist to prevent those who do not pass a criminal check from working in careers involving the elderly, disabled, or children.

For more information on background screening see Accurate Credit Bureau.

Landlord Help Myself to and Eviction No No Accurate Credit Bureau

Now, I have to admit that there have been several times where having the ability to “help” myself to an eviction, especially while using a forklift, might have crossed my mind, but better judgement seemed to always prevail.

The first question that should be crossing your mind is: “Is this even possible”?

The short answer is YES! The longer answer is that in the residential world it isn’t, but in the commercial world it is possible. Obviously this guy didn’t get the message. I would bet huge sums of cash that most landlords reading this article have had similar thoughts of creative ways to evict, even if they won’t admit it!

What is this self-help eviction thing?

Based on specific wording in your lease agreement, when a tenant has defaulted on the lease (this default is usually for not paying rent), the landlord, with proper notification and within specified time frames, can evict the tenant without having to go to court.

Regrettably, this works sometimes in the commercial world, but you would be putting yourself in severe jeopardy to pull this trick in the residential word. With that being said, it amazes me how often landlords put themselves in jeopardy by taking actions, that for all intents and purposes, look like self-help evictions.

Here are a few examples of things that you should NEVER do as a landlord

Lock the tenant out of the property. This is a big NO-NO. By locking them out you are depriving them of the use of the property, and so long as a court has not agreed that they can be evicted and said eviction has occurred, locking a tenant out of the property will not end well for you.

Remove tenant belongings prior to an official eviction. Again, the courts look at this as you obstructing the tenants right to live in the property without harassment from the landlord. Even if the tenant has moved out prior to a scheduled eviction and they have not turned the keys over to you, don’t remove anything from the property. First the courts will not view that as a prudent move, and you can bet the tenants will claim that their uncles very expensive Rolex was in the property the last time they, the tenant, were there.

Do not turn off the utilities. Again, this action will be viewed by the court in very unfavorable terms — for you!

Do not intimidate or harass your tenants. While there may be a fine line that exists regarding this scenario, remember that just because the tenant is violating the lease, (most likely not paying the rent) doesn’t mean that you now have carte blanch to make their life miserable.

Remember… every action you take regarding a tenant must stand up the scrutiny of a judge — more so in today’s world than at any other time. Unfortunately, landlords are by the very nature of what we do, often judged to be the bad guys!

Self-help is not a good thing! Don’t give your tenants extra ammunition that could end up with you spending time in jail, and if you don’t believe that is possible, you are only fooling yourself. For more landlord help and tenant screening tips see Accurate Credit Bureau.

Landlord Tenant Rental Agreements and Rental Leases Accurate Credit Bureau

A rental agreement, or rental lease, is the contract defining such terms as the price paid, penalties for late payments, the length of the rental or lease, and the amount of notice required before either the homeowner or tenant cancels the agreement. In general, responsibilities are given as follows: the homeowner is responsible for making repairs and performing property maintenance, and the tenant is responsible for keeping the property clean and safe.

Many owners hire a property management company to take care of all the details of renting their property out to a tenant. This usually includes advertising the property and showing it to prospective tenants, and then, once rented, collecting rent from the tenant and performing repairs as needed.

In the United States, homeowner–tenant disputes are primarily governed by state law (not federal law) regarding property and contracts. State law and, in some places, city law or county law, sets the requirements for eviction of a tenant. Generally, there are a limited number of reasons for which a landlord or landlady can evict his or her tenant before the expiration of the tenancy, though at the end of the lease term the rental relationship can generally be terminated without giving any reason. Some cities have laws establishing the maximum rent a landlord can charge, known as rent control, and related eviction. There is also an implied warranty of habitability, whereby a landlord must maintain safe, decent and habitable housing, meeting minimum safety requirements such as smoke detectors and a locking door. For free rental agreements and rental leases see Accurate Credit Bureau.

Hidden Landlord Expenses Accurate Credit Bureau

Life as a landlord may be tempting to homeowners unable to sell their homes and others looking to add properties to their investment portfolio.

However, many costs associated with rental properties catch novice landlords by surprise. The following are four hidden expenses experts say new landlords should consider.

1. Increased insurance costs
Rental homes may cost more to insure.
For example, homeowners who cannot sell their homes should be aware that renting out the home changes the owner’s status from primary occupant to investor. As a result, it costs more money to insure the home with a special landlord insurance policy. According to the Insurance Information Institute, the premium is about 25 percent more than with typical homeowners insurance.
The tenant rent payment may help cover the increased expense, but landlords shouldn’t always count on it.

2. Legal fees and administrative charges

Landlords should budget money and time for getting legal advice. Some attorneys will charge a flat rate of about $200 for landlord services and other lawyers may charge by the hour.
Owners should also be prepared to pay for additional work if a tenant needs to be evicted, or there is some other legal dispute.

In addition to legal expenses, landlords will have to pay for administrative costs related to interviewing potential tenants, running their credit histories and checking references. Accurate Credit Bureau has several tenant screening packages available for landlords, real estate agents and property managers.
Property management companies typically charge about 10 percent of each month’s rent for their services.
Many municipalities require owners to register rental homes and make them available for examination.

If there is a defect, the landlord owner will have to pay to fix the problems.
Some municipalities also ask new landlords to attend day-long training classes that cover topics such as how to find good tenants, best practices in property management, and how to spot and report potential illegal activity.

3. Cleaning, care and maintenance costs
To attract tenants, landlords may have to spend up to $1,000 on paint, carpet and landscaping. Otherwise, it might be difficult to find a reliable tenant.
So, homeowners who can’t sell and decide instead to rent their home should plan to spruce up the place — just as they would before a sale.
When a tenant does move in, the landlord may be contractually obligated to fix new maintenance issues, such as a leaky toilet.
Once the tenant moves out, the landlord will need to spend more money to clean up the home for the next resident.
Landlords should be prepared to pay these expenses out of pocket.

4. Increased taxes
Many states and municipalities have tax rules that favor owners who live in their homes, such as the homestead exemption.
These tax breaks don’t apply to investment property. So, new landlords should be aware that they may have a higher tax burden on their investment property.
This issue is especially pertinent to homeowners who turn a primary home into a rental. An owner will probably have to give up the homestead exemption if he or she moves out of a property while continuing to own it. This would mean higher property taxes.

Of course, other expenses related to rental properties actually generate tax breaks for the landlord. For more Landlord tenant information see Accurate Credit Bureau.