How to Be a Landlord.

what happened you ready for this oh yeah Kevin what are you doing all the milks gone yeah and today we're talking about being a landlord and some pro tips right Lauren yeah over here are you ready for this Lauren welcome to Alexander's screen your tenants properly how do you do that it's basically just all about credit and proving their income so what's the number one tool you use the screen well you figure out how to run their credit and you have to make sure that they have good credit not just a good score but also showing you have a good credit a history of actually paying things on time if you can't pay your AT&T bill on time that's if you actually wanting to pay your rent on time and prioritizing your finances are often low really mad at me they say that I'm discriminating against them I have every legal right to ask about your credit and to check out your credit because in a sense in here stealing from credit cards and not paying them for me and rent oh yeah if you have a bunch of collections then it's obvious that you really don't value finances so why would you value not only the condition of the property but paying your rent on time yeah credit is the most important thing for screening in my opinion the other thing now is if you mess up a house or ruin a house you can get a judgment against you and that shows up on your credit report so if somebody goes in with good credit the odds of them wanting to mess up and destroy their credit by messing up a house are very very low so they don't want to mess up the house and get a judgment against them which is just another way of saying a 1 lawsuit because they messed up a house and our credit shot somebody who has a really good financial setup and great credit doesn't want to risk getting a judgment against them if they get sued for messing up a property and then they ruin their finances so they obviously try really hard to maintain a really great credit score and be an honest person and they don't want to screw that up they gave us but it's probably cuz I'm running around the camera segregate them like ISO so what I look for in a credit report basically the ideal credit report is just a bunch of paid as agreed I mean you don't have to have much credit actually it could just be three credit cards or three lines of credit and they gotta show that it's paid a disagreed and you know if you do see one time that it's late you can also look specifically where they 0 to 30 days late where they succeed in ID or whatever you have one person that's penis creep it's great agreed a bunch of haters agreed and then they have one latent within the 0 to 30 range it's like okay stuff happens it's not like I'm looking for the best thing ever we all are human and we make mistakes so they just I mean generally speaking you just should see a bunch of paid as agreed and because of that sometimes the score doesn't actually matter so much the score is like an easy initial filter if somebody is a 590 it's like there will be collections right but if somebody has a 690 and everything's paint is agreed but it's a new credit line okay that's alright but to comment on that Kevin it's just too easy to get 700 now it's almost like if you're below 700 and you messed up at this point that's true it's like so it's just flagging you that's something is something will be wrong there is one exception that I always kind of feel bad about for the individual person is if they have medical bills that they were unable to pay and that's literally the sole thing in their whole credit report that is a derogatory aspect if it shows that they were perfect everywhere else medical bills in America they can really really add up and just take you down and if you're trying really hard everywhere else in your life I can kind of get past that you know a lot of people they'll try and tell me oh well I was in a terrible divorce or something happened to my family it's like I don't care sorry we do care and feel bad that you got divorced or you had a horrible thing happen to your family but that does happen if you messed up your credit like yeah sorry somebody to wear when you do have a divorce and I've seen it happen time and time again the two work together and not taking each other's credit down right I mean exactly possible you yourself and then your ex we're responsible it should be still okay if the couple highly values finances and unless there was like a major job loss or something like that usually you can maintain good credit another thing people will say is oh the recessions really took me down and I just I couldn't handle anything blah blah blah and yeah that sucks and that does happen but I don't want to risk my property renting to you to potentially take me down that's so true it's not to say that people who don't have bad circumstances but that's why there are large apartment complexes like the Warrens grant cardone bars that have onsite property managers the risk is so low because the units are like a thousand square feet they're easy to kind of blow and go new paint job new carpet done you're in and they generally have lower credit standards because quite frankly the people with excellent credit oftentimes don't want to live in apartment complex people with excellent credit they can truly cherry-pick and they are so desirable to landlords they can take whatever they want because they have the income they have the credit so they get the best place so this is the Boyle McDonald's Inferno from the Sierra Foothills to hold the court what they would call the mother lode I smelled the court California oldest in California there are metal acetate amyl acetate is it disgusts me so much have we just learned the actual reason they pour you a sample is not so you can request a refund if you don't like it as to see if there's like bacteria in the line or something like that not that we know anything about wine or we're going to send it back it just kind of came up I always feel like a picker awkward when they pour you the wine and then they have you tasted it was like yeah like I have no idea what it tastes like yeah okay sure [Music] this is so important I honestly think people think it's just like yeah I'll let me just check this off the list item in forget credit this guy's flashing cash I'm already with them giving me cash they got money they look good I think I got a good vibe with these people that's this a really bad idea you should not do that you are giving us a tenant control of your property and your asset and you know people don't like things like Oh their car is clean and they look clean-cut and stuff like that and nobody's renting to them get their cars clean wear clean clothes and look like they got everything put together because they know their credit shot and they know they got a bunch of unlawful detainers on their credit report which unlawful detainer is just a way of saying a landlord started the process of evicting them from a property happens all the time we see it all the time people who are the most well put together oftentimes the ones without a job and going from rental to rent and screw and landlords hey Lauren what do you think about people who just flash the cash I think that if the landlord is asking for a really high rental price and there is somebody flashing the cash that person has something to hide like here take my money so much money don't look me up though you won't need to screen me you could just keep the credit check fee anyway though I'm so glad to being able to have the opportunity to learn from you oh let's talk about gut feelings too you need to run their credit and you need to verify income those are the two most important things if you go based off gut and not run credit you're really really screwing yourself over the only reason you should ever have a gut instinct about somebody is when you've already around their credit and then afterwards if it's like oh this is good but I'm kind of getting a weird feeling about them maybe they're not gonna be nice people or they're gonna be I don't know bad tenants in this certain way other than their credit being good that's the only gut feeling you should be going off of I filled up on bread now the food game I don't know why oh my god what happens if like you get a situation where the wife has really good credit but the husband has got a credit so in one of the two people in the couple situation has good credit the other does not my go beats off of who has the income so if the wife has income plus good credit then you can kind of qualify better in that scenario than the other way around so if the husband who has very low income has great credit but the wife was a breadwinner has bad credit then that's bad they're not financially responsible my thing is when one of the two people in this couple scenario has good credit good income the other person I'd like to have as a call occupant for the tenant if they're in it equally just as the other person is then what happens if they break up or what if they divorce and they had bad credit and I'm left with the one with bad credit yeah yeah so in other words you make sure that the second tenant even the one with bad credit also is on the hook for the liability so that the first tenant one with the good credit is also liable for the tenants bad credit action we think so in other words if one of them left they're both still liable for the lease unless they both cancel the lease and both luck and a lot of the time so try and tell you like oh well I make the money it says the husband and my wife just stays at home with the kids which just stays at home with the kids excuse me that's a lot you don't need to run her credit she's fine no no you should because you feeling you're not stealing in your house well and here's the thing the fact of the matter is usually one person in the relationship takes the responsibility for bill paying and that's the person who matters stuff the person who stays at home is the person responsible for Bill paying then they should be screened as well but I mean just as an overall generalization if you have one person that has great credit and another person in the couple scenario that does not at least the one that has good credit should be your breadwinner please right and they're probably not gonna try to mess up our words here hi uber how you doing man yeah oh sweet thanks were you from India [Music] Swizzle let's go that's right man have a good night everybody's stealing our quote don't wait to buy real estate by real estate wait in fact somebody told me that on Twitter I think that was so cool that they tagged me in that because I still left my father today hold that we have arrived how many people have asked you nobody's asked you I got 20 bucks we don't want to check it in though yeah okay this is this is a wide-angle lens to hook us up you got a little sits not a zoom so the problem we're running into is this is a super wide angle and it's super wide like we can't see anything past like 10 feet right but because it's longer than 3.5 by like an inch they're like oh you need to go to credentials and we're like okay but we only have to get so right what do you guys reckon badge mine you think this is legit what's a general rule of thumb a landlord should use to determine if somebody actually qualifies for the rental they're applying for I keep in mind it's a very generous thumb and depending on how much debt they have which is a huge deal but general of thumb is two and a half times the rent should be there so somebody might make $10,000 a month and spend $2,500 a month in debts that's $7,500 is worth about two and a half times three thousand that's why it's really really important to very and very much analyze their income their proven income with their paid stats or whatnot running their credit - it's just those all together and ironically usually the people with fault maybe not ironically but usually the people with excellent credit don't even apply for properties they can't afford so if somebody's applying for a $3,000 property per month usually take at least ten amnon you know that they're probably making the bread money for whatever their credit tells the story people don't believe it people think it's just another box on the checklist it's so much everything relates back to credit that all the payments I've missed where I'm like you're borderline honestly maybe they have one or two late fees and there's really good but then I get the property back and then I'm like that kind of makes up in at what ends up with them not having the best credit that I was expecting toad and Hello Kitty right there combined oh my gosh so cool come on that's pretty good concert was a little out so we're gonna interject right here where we left off Lord you have this trick that basically when the tenant gives you notice to move out you kind of start working already how do you do that when the tenant still living there yes they give their 30-day notice and right away I let them know I acknowledge that they give their 30-day notice and I tell them okay what days ideally and timeframes work for you for me to show you I'm never letting them think that they aren't going to have showings happen and I also let them know hey I'll try and work with your schedule as best as possible but I still will be giving you 24-hour notices to show the property until I get it rented during that 30-day period and I think what that really does is that actually kind of sets the standard that look this is what will happen but hey the sooner we get the property rented the sooner these showing stopped during the 30-day so if you keep your property really nice and clean you could say this in a sense yeah if you keep everything nice and clean and you're really accommodating during that first kind of wave of showings we might be able to find a qualified tenant really fast and then the showings will stop for the rest of the other day another another tip is to let your tenant know that you do proper screenings that you do intensive phone interviews in a sense before even making your appointment to show the house and also on top of that let your tenant know hey I'm going to be doing a show in between 4 & 5 and I've grouped maybe four groups of people spread them out a little bit so they don't feel intimidated by other tenants or potential tenants looking at the property spread them out in 15-minute increments at the appointment time and tell your existing tenant that hey I have this group of people coming in this hours time and hopefully within that group of people I'll have one person because I did the intensive phone call interviews that actually wants to fill out an application and that they qualify and we rent to them and that's it and I don't have to show the property anymore for the rest of the thirty days but they're at the property tell me a little bit more about these phone call interviews like how do you do those how do you get people to actually tell you stuff on the phone yeah so a lot of time what I have is I have a notepad or you can have it on your computer and I have these key questions that I always ask I asked one number one does your move date line up when I want you to live in that property that's really important because I'll ask all these questions and then at the end I'll be like so are you okay with renting October 1st oh no no I don't want to rent until April like well why are you calling on my house number two I want to know how many people live there number three how many pets if any live there and I want to know about your I want to know what breed it is I wonder how much waste a lot of landlords kind of go by this rule where they don't allow bolli dogs which are a lot of different breeds German Shepherds pit bulls they'll try and say oh I have a lab mix it's like well what is it mixed with and then usually I can get down to it it's a pit bull and I'm not trying to discriminate against pit bulls but there is an actual bully dog list and it just again I'm not trying to discriminate against any type of breed but I just want to reduce my liability that's all it is the last two would be I want to know about your job I want to know how long you've been there and I want to know how much you make that's a little bit of a touchy question sometimes I can get a feel that they don't want to tell me their income that's fine I ask them a lot about their credit I say what's your credit I'm looking for a credit score of 700 or higher have you had any negative inquiries anything like that and then you know if everything checks out with what they say and then they say oh and I'm a doctor I'm not gonna ask them okay what's your what's your gross monthly income I'm believing that you have good credit and you probably are telling the truth about your income if you want to rent to me and you know fill out an application at that time I would be a little bit more ok showing your pay stubs I want to know your income in other words you set up a showing with them if everything kind of overall checks out on the phone you're not like hardcore interviewing yeah but I like the line that you use at the end where it's kind of like when you see the property and you decide you want to fill out a rental application there is a $35 credit so you know how your credit is I love that line and a lot I know I don't know and then I try and say well do you know have you had any credit cards or or anything like that I don't know that's always kind of a weird sign it's a red flag and if they still just say I don't know then you say you know what how about this you know I'm looking for a 700 credit score or higher how about you go to Credit Karma calm it's free go run your simple credit score and get back to me call me if you have that 700 or higher credit score I'd say about 95% of the time they never call me because this I don't know crap usually people with good credit know they have good credit yeah and now you didn't have to inconvenience your existing tenant for people that wouldn't qualify anyway basically filter themselves out yeah don't include the I don't knows right away when I get the 30-day notice from the existing tenant and I have my first showing that which is usually my first time actually seen the property in person I take into consideration at that time what do I need to coordinate for the second this existing tenant moves out so usually I'll determine okay I need five days and so the new rent date will be five days after the existing tenant leaves during that five days I will coordinate painty and I'll coordinate any little minor fixed up I'll coordinate any moving of anything or something like that there's a lot you can do during even two days if you want and you could have a very little gap period for your next tenant great way to minimize vacancy right Oh totally a lot of the time I think my vacancy period is maybe five to seven days and that's because I want to coordinate repairs it's not because I couldn't just put it up right up against when the other one moves it's because I want the next tenant to be happy have nice paint have nice things or the carpet clean or whatnot it's especially important for when it comes time for rent increase that you are completely anonymous you are just the property manager because you want to rent increase them above what they actually expect you can always blame it on the and then that way they are not as upset with you especially remember the tip is your customer so you need to provide that excellent customer service by being the manager and you know what you're the manager that always communicates with them hey you know what I'm going to bat for you yeah I'm gonna try for you totally understand what you're saying and you know what I'm gonna keep you updated as well I'm gonna let you know hey left a message for the oh yeah whatever and you know what even sometimes if they try and negotiate with you you have to think like okay they're great great tenants like maybe you want to rent increase than $75 they say that's so much I really really think I should just be 30 hey you know what I was able to negotiate 65 that's what I could do even though you know you are the owner but then you're the hero so and you communicate very well which remember it's a customer service business ultimately tenants biggest regard is how quickly the property manager respond to requests and sometimes you're even luxury requests where a tenant might say okay okay well if I'm gonna get a red decreasing hey you know what did you pay for tree trimming or me that literally happened to me you know what let me try sorry well so did that actually happen to you yeah that did on a property all of our properties we say that the attendant is responsible for their own landscape so it came time for rent increase these were wonderful tenants I actually give a very very small rent increase and every tenant always feels the need to say something rent increase time because they just feel like oh my gosh in terms of requests well if they don't understand inflation and and how things work where it just makes sense to have even a little bit of a rank a rent increase even if that's like 25 to 50 dollars so I think I've read an increase than 50 dollars which is very minimal in this appreciating market and then they wanted to say well um you know our palm trees are a big hassle in our backyard so if there was any way that maybe you could do this yearly maintenance or monthly maintenance whatever it was you know no sorry that's in your contract you are in charge of your own landscaping that is not a repair we're bonus pipe is thirstier or this is malfunctioning this is completely in the contract saying you are responsible you can't put that back on me just because I increased you here's the other thing if you rent it to somebody for an above market price you've got a prior to these properties correctly if you rent it to somebody for an above market price they could easily jump ship and get a bit better deal somewhere else but if you rent it to somebody for an under market price or an at market price at the time the odds are even come rent increase time they're not gonna find a better deal anywhere else that's the thing is always keep your tenants feeling like they have the best deal because when it's rent increase time they're gonna be shopping they're gonna be thinking every day could I get something better with this rent increase that I just got and then always have it be where they come back saying oh my god I got a good deal I am so lucky have it be even $20 under rental market just always keeps me slightly below the good tenants because they are worth keeping the great tenants are worth keeping and you know what turnover is expensive it is it is very expensive I know people can get caught up in the green of thinking oh the markets appreciate you so much if you have a good tenant you have to play a balancing game you have to know I shouldn't increase them too much because I want them to be happy when they go shopping look market could be 3 grand if you're at 29 50 shut up yeah big scheme of things you got a good tenant taking care of your property it's 600 bucks a year and honestly if the tenant moves you probably spending 2 or 3 grand yeah there's so much work in every turnover situation so we've already touched on how a good quality tenant is generally going to look for a good quality property that is the better falling the tenant you're looking for you need to have a better quality property in terms of renovation location and everything else related to it and the service the manager gives low quality tenant usually going to be stuck in an apartment building higher quality tenant oftentimes can rent and demand to rent in an area that appeals to a lot of homeowners and just again as a disclosure all of these things you qualify to tenant with the credit and they've covered everything they can still turn on you they can still be terrible things could happen but this is just to increase the odds of you having a good time with your tenant in your property I had one time where a tenant a be their 30-day notice and their house that they lived in my property was so full of clutter that I actually made the decision to take it off the market during that 30-day in between period where I usually get into place rented very quickly because I was showing it people couldn't get past all of the clutter so that would be a case where it's just like oh crap this isn't working for me I will take it off the market once it was completely vacant I rented it within three days because it was just terrible so yeah things can't happen and they actually kind of destroyed my carpet too but they had good credit so you just don't always know so yeah that's the downside the risk factor you have to take when you have a property that you own a tenant in it but yeah they keep that carpet and that was definitely taken out their security now we weren't super thorough in this video there's gonna be a whole lot more information on that but what we wanted to do was open it up for sort of a Q&A so if you have any questions ask away and Lauren says she'll comment on every single comment she didn't say that but you told me once there was a secret about the most recent rental reference not being the best [Music] that's a great tenant you love you're not recording this right no no no not being recorded at all they're great you'll love them

Channel: Meet Kevin

Views: 76,004

Rating: 4.890368 out of 5

Keywords: real estate, landlord, property management, mistakes, lessons, learned, tips, suggestions, finance, investments, rentals, rental property, units, management, wealth

Id: VQ8vlnfn_kY

Length: 25min 38sec (1538 seconds)

Published: Fri May 25 2018