Can your tenant REALLY afford the rent?

How do you determine if a tenant will be able to afford to rent your home? Generally, the rule of thumb in the industry is that rent costs should not exceed 30% of the tenant’s take home pay. In theory, this gives them enough money to afford the other costs of living expenses (food, clothing, gas, creditors, electricity, etc).

 

However, a recent survey by the Rasmussen Reports for Country Financial found that more than half of all Americans spend more money than they make for several months out of the year. Also, only half of all people surveyed say they actually have a monthly budget in place.

 

This takes us back to our original question – can your tenant REALLY afford the rent?

 

 

Biggerpockets.com recently recommended that landlords screen their tenants financial records like a lender would at a bank. That means in addition to verifying income, perhaps landlords should also have tenant’s provide information such as:

·         Bank balances & other assets

·         Monthly expenses (living)

·         Liabilities – including monthly payments and time left to pay off (credit card debts, auto loans, alimony, student loans, judgments etc.)

 

By gathering all of this information, you will have a much clearer picture of your tenants financial responsibility, and be able to determine if in fact they have enough means to pay their rent on time. If you find their debt-to-income ratio is just too high (i.e. monthly debt payments exceed 36% of monthly income) then perhaps it might be a good idea to pass on the applicant at this time.

 

For this and more information about interpreting credit reports, and screening tenants please contact ATS Inc. today!

 

Since 1988, ATS Inc has been a leading provider of tenant screening services  for Landlords, Property Owners, Property Managers and Real Estate Professionals.

Keep Your Rental Property from Getting Damaged

We’ve all seen the frightening images of hoarders on reality TV, but it’s hard to imagine actually knowing someone who might suffer from the condition. Even worse, it’s hard to imagine that someone might be living like that IN YOUR RENTAL PROPERTY.

 

The first step to detecting a hoarder is to understand the condition. Hoarding syndrome is defined as: “Collecting excessive quantities of poorly useable items of little value, failing to discard items, and difficulty organizing tasks.”

 

A red flag might be if your tenant has a lot of “things” piled up that seemingly have no monetary value, yet they refuse to discard of it. For example, if there are piles of what appear to be trash in a yard, but it’s never brought to the curb for pickup. Also a home with a strong, foul odor could be the result of rotting food and garbage. Be wary of any tenant who constantly makes excuses to delay home inspections, or is never around to let you voluntarily enter the home.

 

 

 

 

People with this condition could be hoarding piles of “things” that matter to them, and live in such a way that all furniture, floors, and rooms are piled with junk. There arealso animal hoarders, who take in dozens or hundreds of dogs, cats or other pets. Either situation would be disastrous for you, the property owner.

 

Believe it or not, this “common” psychiatric condition affects an estimated 700k to 1.4 million Americans, and few are actually receiving treatment. Researchers say that hoarding in older adults can be quite dangerous to ones health, as it creates conditions suitable for fires, falls, unsanitary living, and inability to property care for oneself (eat, use the toilet, leave the home). It can also attract vermin or insects (if spoiled food is being hoarded), which is a detriment to sanitation and health.

 

If neighbors are complaining to you about excessive animals, trash or strange smells, take the claims very seriously. Evicting any tenant can be time consuming an expensive, but cleaning up after a hoarder can cost tens of thousands of dollars in waste removal alone.

 

To avoid renting to a hoarder, find out how to properly screen your tenants and what other red flags to look for by visiting our website today!

 

We’d love to hear your tenant nightmare story! Enter to win our Tenant Horror Story Contest today to become eligible to win $400 in FREE tenant screening services!

 

4-1-1 on Radon Testing

Landlords in Maine are scrambling to comply with a new law that requires radon testing in all residential rental buildings. The deadline was March 1, and while many are doing what they can to avoid being fined $250 per violation.

 

So, what is radon?  It’s a colorless, odorless, radioactive gas that forms from the decay of  radioactive elements such as uranium, which can be found in soil and rock. Radon can transmit from the ground to air and water. It can be found outdoors in low levels, but in homes, dwellings or well water it can spike at dangerously high levels.

 

Long term exposure to radon can cause cancer. You can buy home testing kits to test the levels on your property, or you can hire a professional. The Environmental Protection Agency (EPA) recommends that all buildings be tested below the third floor for radon detection.

 

Landlords can address problems with radon in rentals in several ways. First, you can provide good ventilation with open windows and fans to disperse the gas.  Also, proper sealing of the foundation and lower levels will help to keep the gas from seeping from the soil into the dwelling. A radon contractor would be the best source of knowledge for your particular region and structure.

 

The EPA also has more information for tenants on their website.  You can also find a radon contractor in your area here.

 

For this and more information on maximizing the profitability of your rental, please visit our website at http://www.alwaysscreen.com.

Top 5 Tenant Excuses

You think you’ve heard them all before, but then your tenant drops another crazy one. What are some of the worse excuses you’ve ever been given by tenants?

 

1. “But, it’s Christmas!”  Has there ever been a more frustrating excuse for not paying rent than the holidays? Some tenants actually think their “obligation” to buy presents outweighs their lease obligation to pay rent.

 

2. “That dog you see/hear on the property is not ours, therefore shouldn’t require us to pay a pet deposit or be evicted.” It doesn’t matter to whom the animal belongs to. If your lease prohibits pets, or requires an added security deposit than that is the rule governing the property.

 

3. “I smoke marijuana for medical reasons.” Anyone claiming this better have a really authentic doctor’s note. Also, it is still your right to include a smoking ban of ANY kind in your lease.

 

4. “My job won’t pay me.” This is why employment verification is so important. If someone has a legitimate job, they should be getting legitimately paid. Do your part to make sure you are renting to individuals who will not make excuses for late payments due to sketchy employment situations.

 

5.  “But my last landlord let me paint.” Again, if you don’t want tenants to do certain things then make sure your lease indicates just that. Be very clear on what is and isn’t allowed in your rental.

 

For this and more information about screening tenants, please visit our website at http://www.alwaysscreen.com.

Gold Medal Landlords

In honor of the Sochi Winter Olympics, ATS Inc. would like to recognize these landlords for their Gold Medal performance in the industry!

 

Bronze Medal: Shorenstein Building Management Company

 

In 2010, Shorenstein sought to reduce operating costs through energy efficiency measures. How did they do it? By implementing several programs to raise consumption awareness among tenants. Some tactics included turning down lights during non-peak business hours and flipping off key building functions on Saturday’s.  The company was able to trim $1.7 million off of their expenses for the year, and they also curbed their carbon monoxide emissions by 4,800 metric tons annually.

  

Silver Medal: Preservation Development Partners

This company recently purchased an affordable housing complex in the Bronx, and plans to keep the units accessible to low-income residents for at least another twenty years.

The building is houses 252 units, which will remain at a reduced-rate of 30% of residents income. The new owners are planning to spend about $35,000 per unit in renovation costs, and are now being praised for having the “tenants best interests at heart.”
 

Gold Medal: Willow Tufano

At the tender age of 14 Willow became a landlord in Florida.

Willow now owns two properties at the age of 16, and was recently featured in a film that promotes alternatives to public schools. Kudos to Willow on being one amazing real estate investor!

 

For this and more great landlord stories, and to get the fast, reliable tenant screening reports, please visit our website at http://www.alwaysscreen.com.

Landlords: Get Stranded on a Deserted Island

Pretend you are a landlord and want to disappear for a while on a deserted island. What things could you not live without? Assuming of course this island has wi-fi or a cell phone tower here’s our suggestions of what to take with you:

 

·         Your smart phone: Manage all of your online transactions (rent deposits, payments to vendors) from your phone.

·         Contact list that includes:

1.      Insurance provider information

2.      Repair and maintenance service contact information

3.      Tenants contact info and rental property addresses

4.      Local police and fire within proximity of your rental properties

·         Designate least one person back on dry land who knows the location of your lease agreements and other legal documents

·         Sunscreen

Who wouldn't want to be stranded on a deserted island?

 What items would you need to take with you before escaping to a (Semi)-deserted island?

 For this and more advice for landlords, please visit our website http://www.atshome.com

How to: selling property with tenants

Home values are improving in many areas around the US and perhaps you are now considering trying to sell while things are on the upswing. The only problem is, you have tenants and want to list while they are still living there because you can’t afford to keep your property vacant for months before a sale.

 

The good news is, it can be done.  Just make sure you follow a few bits of advice so selling your property can go as smoothly as possible for you, your tenants, and potential buyers.

 

The first step is knowing the laws for your jurisdiction, as they are different everywhere. How many days must you inform tenant of the home being put up for sale? Does the tenant have a right to refusal during their lease term?

 

Assuming you’ve done your homework, then know that having open communication with the tenants should always yield positive results. For example, make sure you give them at least 24 hours notice before a showing.  You don’t want to be in violation of your lease in the haste of wanting  a sale. Also, if the tenant isn’t prepared for a showing then it’s likely the property will not be shown in its best light. That will leave both potential buyers and your current tenants with a bad taste in their mouth.

 

For this and more information about selling a rental property with tenants, please visit our website at http://www.alwaysscreen.com