Archive for March, 2012
Tenants Breaking Their Lease
One thing which occurs more often in Rental Property Management is Tenants breaking their lease.
Let’s face it, life happens and Tenants break their leases for many reasons . . . they can’t pay any longer and are skipping out or, it is generally something less sinister like . . . getting a great deal on a short sale and just learning that they have to close in 2 weeks . . . YIKES!! Either way, you have to know the Tenant’s and your responsibilities when this happens.
As you probably already know, the Tenant has the responsibility for the rent through the end of the term of the lease as stated in their lease agreement . . . and to leave all the utilities on and pay for them until the property is re-leased (if you used our lease form). You, as the Landlord, if you want to be able to collect any rent through the end of their lease term, must immediately and diligently market the property for lease again. Be careful not to market the property at a higher rent amount than the previous Tenant paid or you may have difficulty in collecting money for lost rent in court if . . . you “Jacked the Price up” which is how a judge may see it. You will only be entitled to the lost rent between the time your previous Tenant vacated or last paid rent and the beginning of a new lease with your new Tenant . . . no double dipping!
The subject of Tenants breaking their lease along with many other property management challenges are covered extensively in our new Property Management Training Program; Manage to Make Money . . . . the Real Estate Series. Click here for a workshop near you: Workshop. This new series has been developed around one of our books: Manage to make Money . . . Your Guide to Profitably Managing Rental Properties which is now available for California laws as well as many states in the Midwest. It is a virtual Survival Guide for anyone managing Rental Properties!
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Click on this link for a short video about what to do when Tenants break their lease: Tenants Breaking Their Lease
Thank you for reading!
Pat and Kris
Few of us would ever allow our Tenants to move in before their lease begins but . . . many of us do unwittingly!
Would you ever knowingly allow your Tenant to move into your property early? Perhaps unwittingly.
Think about this scenario for a minute: You have rented your property and the lease begins on the 1st of the month which is a Sunday. For our convenience, many times, we may be inclined to give the Tenants the keys on a Friday or Saturday, so that we don’t have to do it early Sunday morning. What happens so many times is that the Tenant is excited about their new place and now that they have the keys they go by just for a look . . . just to “breathe it in”. When they get there, they remember those two boxes in the back of the car . . . “Gee, if I get those out, then I can start with an empty car on moving day.” Once those boxes go from their car to the house or condo, technically, they have “moved in”!
Now, let me ask you, what is the effective for their renter’s insurance? Chances are, it doesn’t take effect until the 1st. why would it start sooner? Without that date (the now NEW move in date) being covered in their lease or their renter’s insurance being in effect . . . you, the Landlord, are liable for any damage, or injuries they may occur during that time between when they moved the boxes in until the lease start date on the lease!
To solve this issue, we always wrote the lease to begin on the day we gave them the keys and, required the Tenant to have their renter’s insurance effective on that date also. You don’t necessarily need to charge them for the extra days rent . . . just cover yourself legally and from a liability perspective.
In summary, think through the date relating to move in dates and “possible” move in dates. You might just save yourself some heartache.
To view a video on this same subject click on this link: Early Move In
If you have any questions about this subject, fell free to contact us via our free service; ManagementLink. Simply click on the link and type in your question or issue. We will get back to you within 24 hours with an answer.
Thank you for reading!
Pat & Kris Larkin
We have founded and developed “Manage To Make Money” which is a resource for anyone, novice or professional who manages rental properties. We provide Books, Documents and Forms, Live Seminars, E-Books, Free Webinars, Tips and Private Consulting. Check it out!
Manage To Make Money – Cottonwood Falls, Kansas 949-689-4344, Info@ManageToMakeMoney.com
Screening prospective Tenants can be difficult but here are a couple of tips that will help you to minimize your risk of getting a bad Tenant.
One of the main elements in screening your Tenants is to get a credit report. There are many other ways to check out your tenants but a credit report will do the best job of surfacing potential issues in their ability to pay rent and in general will help you to sort through your applicants. You can get a credit report in a couple of different ways; First, is to have your prospective Tenants run their own credit report. But be careful, free credit reports are available but rarely have a credit score. A credit score is key. Without the credit score you are subjected to reading through reams of credit information… some good and some not so good and having to figure out if this applicant is a good risk or not. The credit score will do all of that for you. Secondly, you can find many companies on the web that you can sign up with to run credit reports for your applicants. These companies will of course check you out first to be sure that you are trustworthy enough to be dealing with such sensitive information and that you will get the proper authorizations from your applicants.
As to what credit scores are good and bad; that depends on your market but I can give you some very rough ideas: a stellar credit score is 800+ and a score in the 500 range is going to be due to a lot of late payments, possibly judgments or even a bankruptcy.
In summary, a credit report will “tell the tale” about your Tenants. Be careful though not to be too restrictive; these are tough economic times we live in and you need to hear everyone’s “story”.
To view a short video on this subject go to: http://bit.ly/eCprVn
Thank you for Reading!
PAT & KRIS
Visit our website at: www.ManageToMakeMoney.com to see the full array of rental property management resources as well as our latest current live seminar schedule.