Two little old men--should they stay or go?

Rehabbing, Fix and Flip, Rental Properties
1

I am making an offer on 4 1-bedroom cabins. Two are vacant and two are rented to two elderly gentlemen @ $425 and $495/month, utilities included.

These seniors of course are on fixed incomes, can walk to McDonald’s for their morning coffee, and love their little cabins.

I will fix up the two vacant cottages, furnish and rent them.

But I am stymied by the little old men. I won’t just kick them out. One of them waited almost 2 years until his cabin became vacant so he could move in next door to his buddy.

So how do you all deal with seniors who have taken root and may be unlikely to find as good a deal in housing?

Furnished owner

2

This is a business, not a charity. If they want to stay and are paying market rent, I certainly wouldn’t kick them out. If they are paying below market rent, I’d start raising it slowly until it reaches something near market rent. If they want to stay, they’ll pay it. If not, they’ll move on.

Don’t forget the number one rule in the rental business: NO GOOD DEED GOES UNPUNISHED!

Mike

3

Mike and you other unfurnished rental owners:

I will keep the little ol’ guys and raise them just a little. I’ve also decided I can’t afford the time now to renovate and furnish so I will rent out the other 2 cabins as is.

Where do you go for a credit report? Cost? How do you run a criminal check?
Do you subscribe to an on-line agency or is this a fee per tenant application cost?

FurnishedOwner

4

ntnonline.com is your friend.

5

http://www.cbacredit.com/

Your local branch of the National Apartment Association

http://www.naahq.org/

should have information about local tenant screening companies.

I had a guy come out and inspect my office as a part of qualifying to obtain information about people online. I can get credit, bad check, criminal, and rental history. Screening costs $25-$50 per applicant. Local laws may limit the amount you can charge for an application fee. You can also look up defendant and plaintiff activity on a person throught the county courthouse website. I believe that charging an application fee discourages some people from submitting an application. I also don’t want to lose a good applicant to a competitor because I charge a fee and they don’t. I do not check this information unless I am absolutely sure from the application that I want to rent to them.

6

Is there a limit legally how much you can raise rents in say a year?

7

Generally speaking, yes. It varies state by state.

GooD LucK! :beer

8

I love that quote from Mike about rental real estate “No good deed goes unpunished”.

9

The deal fell through, so the little old men are safe.

Place just needed way too many repairs. On to the next one.

Furnishedowner