By David Pickron

Maybe nowhere does the saying “time is money” apply greater than it does in our industry. For each of us, we are well aware of the expense of having a property sit empty for a month or more, painfully knowing the impact it has on our bottom line. Experience has taught me that in order to protect my investment, I have had to establish hard and fast timelines to ensure that my returns always stay on the positive side of the ledger. This starts right with my first interaction with a potential tenant, all the way through the move-out process.

Here is my counsel on laying out timelines for the first three critical pieces of the rental process:

Completing the Application-

I recommend setting a strict timeline for completing the application. My standard practice is to give the applicant 24 hours from showing the property to complete the application. This ensures that I still have the ability to show the property to other potential tenants without having to wait days or weeks for them to decide if they want the property.

Depositing Funds-

Once the application is approved and we have completed the on-boarding process, I require a non-refundable deposit within 24 hours to hold the property. Some landlords like to get the deposit before the application process, but I personally found that refunding that deposit if they are not approved is a hassle and if I can onboard quickly, I have the deposit soon enough with someone I know is qualified. Again, this is up to you to determine, but apply this to all your tenants.

Rental Payments and Moving into the Property-

Although you may see these as the same things, they are very different. This is especially true when it comes to source of funds. With the rise of government involvement in housing, specifically Section 8, they are trying to control the timelines surrounding your property. If you decide to rent to someone receiving government assistance, the process takes two months to complete. In this case, are you willing to give up two months’ rent as you wait and hope that the applicant and your property are approved? For me, I require you pay the first month’s rent and take possession within two weeks after the lease is signed.

This process may seem obvious to many seasoned landlords. But I have one question, should you put these timelines in your detailed criteria before someone applies? The answer is a resounding YES! With all the tenant complaints and fair housing that is coming against us landlords, sharing your required timelines in a criteria shows that you have a strict, written policy and that treating everyone the same is something you take seriously. Now as a landlord, I know things change, markets change, and if you need to change your timelines in a criteria, then simply document the change and date your criteria sheet. If today you require move-in in 2 weeks, nothing says you cannot change your criteria tomorrow to say 4 weeks if needed; just always, always, always document it.  If you need a sample detailed written criteria, please email us at info@rentperfect.com and we would be happy to get a copy to you.

David Pickron is President of Rent Perfect, a private investigator, and fellow landlord who manages all types of rentals. Subscribe to his weekly Rent Perfect Podcast (available on YouTube, Spotify, and Apple Podcasts) to stay up to date on the latest industry news and for expert tips on how to manage your properties.

Members of National REIA can take advantage of special pricing from RentPerfect; the solution for rental property owners and managers for screening & managing tenants.  Learn more by visiting www.rentperfect.com or calling 1-877-922-2547.

By David Pickron

I have a neighbor who over a year ago received a call from the FBI, seeking her assistance in targeting a group of individuals who were performing illegal wire transfers.  Over the year she had assisted with other tasks and had become a trusted ally of the FBI.  Then recently, the FBI asked her to increase her involvement after having gained the trust of the illegally operating group.   They told her they had set a trap to finally catch these guys and that they would keep her updated on their every move.  They thanked her for her willingness to do her part to catch the bad guys.  Then the call came in with her FBI contacts directing her to transfer $700,000.00 to this group, where they could then track the money to see where it went and then make an arrest after 18 months of work.  The FBI guaranteed the return of the money once the transfer was completed and they were able to make the bust.  She agreed, transferred the $700k, and waited… and waited.   After a few days she began to wonder when the money would be returned.  Not understanding how long the arrest might take, she was patient.  After a couple of weeks went by, she decided to call the FBI and ask about her money….as you already guessed, they had no idea what she was talking about or even who she was.

These stories of fraud are becoming all too common. The minute details and the elaborate amount of work these fraudsters are going through to trick you are amazing.  We used to worry about our mail being stolen, then our email being hacked, but we are entering all unfamiliar territory.  Your need to stay vigilant is more important than ever; consider these six vital tools in your fight to protect what is yours.

1.  Freeze your credit.  https://www.experian.com/freeze/center.html

With your file frozen, others will not be able to access credit in your name.  When you need to access your credit for real, simply login to Experian and put a “Thaw” on your file.  This is completely free, and you can do it as often as you like.  As a Private Investigator, I am often asked how to protect yourself from identity theft or people opening fraudulent accounts in your name.  This is my first go-to.

1.  Treat your bank account number like your social security number.  For years we passed out a piece of paper called a check which contained routing numbers and account numbers.  With ACH transfers and wire transactions, your bank account information has become the new gold standard for criminals.
2. Use a credit card for most transactions.  There are protections that credit cards offer.  If something is fraudulent, you can dispute, and the company involved with that transaction is usually found at fault for letting a fraudulent transaction go through their system.
3. Expect your bank to be more diligent when it comes to wire fraud.  What used to be an email request for me now requires in-person, ID scanning, code-giving experience.  A little frustrating, but these financial institutions are only trying to protect you.
4. Be specifically cautious when buying a home and going through a title company.  There are countless stories about fraudulent wiring, where the down payment you thought was going to the title company actually went to the Congo.  Check the URL and make a phone call to the title company to clarify the wire.  Don’t hesitate to go back to a certified cashier’s check right from your bank.
5. Verify the URL on all emails that require you to change your password to your financial institution or any website.  Fraudsters know we use the same passwords on many online sites.  Getting your email account and password you use at Starbucks could unlock your account at Bank of America.  I always suggest having sole and separate passwords on all websites.  It is hard to remember, so if that’s too much, at least change the financial institution credentials to be unique.

I could not possibly cover all the ways you can get scammed today.  With AI and Chat GPT, the spelling is getting better on the emails and the graphics are looking more legit.  I can promise you with all the data breaches, your identity is most likely out on the dark web, so treat your transactions as if everyone is fraudulent at first.  This country was founded on innocent until proven guilty, your transactions should be considered fraudulent until proven legitimate.

David Pickron is President of Rent Perfect, a private investigator, and fellow landlord who manages several short- and long-term rentals.  Subscribe to his weekly Rent Perfect Podcast (available on YouTube, Spotify, and Apple Podcasts) to stay up to date on the latest industry news and for expert tips on how to manage your properties.

Members of National REIA can take advantage of special pricing from RentPerfect; the solution for rental property owners and managers for screening & managing tenants.  Learn more by visiting www.rentperfect.com or calling 1-877-922-2547.

by David Pickron

History is littered with what, at the time, were considered “game changers.”  Those game changers have become commonplace in our current world; when was the last time you marveled at the technological breakthrough we know as the wheel?  Or the lightbulb?  Or even the fact that we fly in airplanes all around the world?  The likelihood is we dismiss or overlook these incredible technologies and innovations because we have become so familiar with them.  We don’t see just how amazing these everyday conveniences are and how our lives are better for them.

In the world of landlords and property management, game changing circumstances might be even harder to identify as many operate by the “if it’s not broke, don’t fix it” rule. Having nearly 30 years of experience in this field, I have seen a lot of ideas come and go but nothing has struck me as a “game changer” more directly than the introduction of online rent payments. After all, if I’m not collecting rent, then I have no business being in this business.  The following are the three main reasons I view online rental payment programs as a true game changer.

The System Collects Rent for You

For far too many years, I had a renter who consistently paid rent on the 5th of each month (or later) and was never charged a late fee, even though they should have incurred one every month.  Why did this happen?  First, I allowed it to.  Second, I was always busy with other things and was genuinely happy when the check finally did appear.  With the advent of rental payment programs, I was able to take back control of who is in my property and get paid on time, every time.  Imagine your tenant receives an email from the rental collection system prior to the due date indicating that rent is due in 5 days, then 4, then 3, etc.  If they don’t pay, the system automatically reminds them that rent is due.  If rent becomes past due, the system automatically begins calculating and assessing late fees starting on the date indicated by your lease. If a tenant calls, seeking permission to make a partial payment or waive fees, you simply tell them there is no way to do that because the system won’t allow it; the system will only let them pay the full amount including late fees.  It’s an easy way to play “good landlord, bad landlord” without getting your hands too dirty.

Rent Collection Consistency

As with all things in our industry, consistency is the name of the game when it comes to anything that can be regulated or overseen.  This is especially true in regard to all interactions with your tenant, including collecting rent.  In my early years I had multiple properties and each tenant paid differently.  One would bring a check to my home, another would mail theirs, and I even had one that would go directly to my bank and deposit directly into my account (with my bank account numbers which I provided). I was scoring a 0/10 when it came to rent collection efficiency and consistency.  Having the ability to effectively “set it and forget it” when it comes to collecting rent will allow you to be consistent in your practices and get paid consistently.

Benefit to the Tenant

Unlike the heartless, greedy persona that many use to describe their landlord, the overwhelming majority of us truly do want to provide some benefit to our tenants. Online rental payment programs allow our tenants to 1) stop writing checks, which no one wants to do anymore, 2) set up automatic payments so you get your money at the same time every month, and 3) reports successful payments to the credit bureaus, helping to boost their credit. Strangely enough, the things that benefit your tenant also benefit you.  I challenge you to show me a landlord who doesn’t benefit from getting paid on-time on a more consistent basis; it’s a win-win for both parties.

Recently Rent Perfect had our own “game changer” moment with the launch of our own online rental payment system. Regardless of whether you use Rent Perfect for tenant background checks or to create your own custom leases, rent pay is available to all Landlords and Tenants.  All landlords now have the ability to use the exact same process I use to manage the oft challenging tenant lifecycle.  Designed with input from seasoned landlords across the country, this program was built to help you collect rent in a consistent manner to the benefit of every tenant… and yourself.  When you are ready for a game changer for your business, we invite you take come make your life easier with rent pay.

David Pickron is a Landlord (short & long term rentals) and President of Rent Perfect.  Their Online Lease Agreement allows you to send your tenant(s) a customized lease agreement, electronically & securely. They offer the most accurate & thorough credit & background screening available. Members of National REIA can take advantage of special pricing from RentPerfect; the solution for rental property owners and managers for screening & managing tenants.  Learn more by visiting www.rentperfect.com.

by David Pickron

It might seem like an antiquated phrase since most of us no longer buy apples by the bunch, but the concerns about one bad apple spoiling the whole bunch are real.  As it applies to our industry, this is becoming a critical issue. Here’s why: with the rapid increase of rents over the past few years, more and more of our properties are being shared by more than one tenant in an effort to be able to just afford the rent. In most cases as we backtrack, having more than one tenant would equate to having more than one applicant for the lease.  And when you have more than one tenant potentially on the lease, there are three major questions you need to answer before signing that lease.

Question #1- Will I Get my Rent?     

Logically it is easy to assume that having more tenants in the property would up the odds that you are going to get paid in full and on-time.  More people and more income should add up in the landlord’s favor but that isn’t always true.  Proper screening, including criminal, civil and credit checks, is critical if you want to protect your investment.  Let’s consider that you have three individuals who are friends apply to rent your property.  They each complete an application and upon review, you find that one of them has a history of evictions, their credit is below the standard you normally require for this property, and they are currently unemployed.  What do you do?  You have a few options and things to consider.  How is the credit and eviction history of the other applicants?  How long ago was the eviction for the affected applicant?  Was it affected by Covid or other outside circumstances?  What kind of history does the applicant have with the other applicants who have good credit?  In essence, you have to rely on your criteria and your calculated trust in the other applicants on the lease to pull through with payments, even when or of the poorly qualified tenant can’t fulfill his portion of the lease payment.  This by far is the easiest of the three questions to answer because the additional tenants can always help carry the payments if needed.  The next question is much more difficult as it deals with the complexities of personality and behavior.

Question #2- Will My Property be Taken Care Of?

This question is where a careful review and analysis of each applicant’s criminal history is critical in ensuring the value of your property.  It’s been said that we become the sum of the five people we spend the most time with. If one or more of your applicants has a criminal history, the likelihood of them having friends and associates with similar history grows exponentially.  Let’s say you have an applicant with a history of drug-related arrests. While it’s not a guarantee, the odds of that applicant having friends with similar histories are high.  Any seasoned landlord will testify that the criminal crowd has a history of destroying property, either through their own negligence or the negligence of the people they invite over.  So while you may have two tenants who are law abiding and take great care of your property, you have to be on the lookout for the one that can bring destruction.  Again, having and applying a strict criteria on each applicant can help save you and your property.

Question #3- Is My (and the Neighbors) Safety Compromised? 

This may seem like an outrageous question, but my experience says that is much less far-fetched than you might believe.  The last thing a landlord wants is to compromise their safety and the safety of the surrounding neighbors.  We’ve all heard the news stories where the neighbor can’t believe that their neighbor was involved in (fill in the blank) and that they seemed like such “nice guy.”  It’s only when the reporter unveils the laundry list of criminal offenses and past disturbances that the neighbors and the general public see what the offender was really like.  Having a criteria and using the background check results to measure against it for each and every applicant is paramount in keeping all involved in a safer situation. .  If I have to go to the home to collect unpaid rent, I’d rather go in knowing my safety wasn’t in question when I knock on the door

Let me reiterate, you need to look at each applicant individually.  Then take that individual analysis, add it all together, and make your rental decision. I always invite you to reach out with questions you have regarding applicants.  While we don’t offer legal advice, we can provide you with practical solutions that we have discovered over the last thirty years in managing properties and performing applicant background checks.  Our goal is to help ensure you get paid and that your property is taken care of, all while keeping you safe.

David Pickron is a Landlord (short & long term rentals) and President of Rent Perfect.  Their Online Lease Agreement allows you to send your tenant(s) a customized lease agreement, electronically & securely. They offer the most accurate & thorough credit & background screening available. Members of National REIA can take advantage of special pricing from RentPerfect; the solution for rental property owners and managers for screening & managing tenants.  Learn more by visiting www.rentperfect.com.

by David Pickron

Rarely in life can the quick version of anything ever compete with the more time intensive “real deal.”  Think of any instant food and you will quickly realize that I’m telling the truth.  The same had held true for real estate investments for at least the last century… but times, they are a changin’.  As you look at your portfolio it may be time to consider transitioning some of your long-term holdings into short-term rentals, and here is why; short-term rentals can generate up to six times the amount of revenue as a long-term hold.  My average long-term hold properties cash flow at around $200 per month; my short-term rentals cash flow just over $1200 per month. Does that get your attention? 

As you consider transitioning from long-term to short-term rentals, you should examine the following factors to help ensure that the changeover is successful: location, needs, and saturation. 

LOCATION

The old mantra of location, location, location in relation to real estate has endured because it is true.  For short-term rentals, it may even be more important.  A friend of mine recently converted their 5,000 square foot custom home in a regular residential neighborhood in Phoenix, AZ  into a short-term rental.  In his mind, he had already cashed the checks after he listed the home on the popular short-term rental sites. But there was a big problem…there was no draw for potential renters to come to the property as it wasn’t near any major attractions.  That property quickly turned back into their full-time residence, having never once been used as a rental.  Having an attraction or destination near your property makes it ripe for transition to short-term.  Whether it is near other resort properties, mountain towns, beachside escapes, or national parks, having a natural draw for people to come to the area instantly makes it an eligible property.  Obviously warm places in the Winter and cooler places in the Summer create demand as people are looking for an escape.  If you have an extensive portfolio or are just looking to purchase your first investment property, make location a key component of your research process. 

NEEDS

Depending on the location of your property, the needs of your potential renters need to be paramount as in your conversion decision.  I have several properties that are located near a cancer treatment center. When I originally purchased those properties, I did not know there would be a severe need for this type of property because the treatment center hadn’t even been built. My curiosity got the best of me when this facility was built, and I called to inquire if they ever had patients with short-term housing needs. It was after this conversation that I decided to convert these units into what they are today. Most of those renters in these properties are in town for several weeks or months at a time receiving treatment for life-threatening illnesses and insurance companies are reimbursing their housing expenses. In this case, my short-term rentals are thousands less than costly overnight hospital stays. These tenants have very specific needs, whether it be accessible facilities or high cleanliness standards.  I have prepared those properties with those specific needs in mind and can market them as such.  In other areas, I have properties that are more vacation oriented, with access to golf courses, hiking trails and other recreational opportunities.  Those homes are equipped to help my renters have the best experience while on property with helpful hints on where to play, where to relax and where to eat.  There is an obvious expense to preparing properties to meet the needs of potential renters, but those expenses are recouped quickly with satisfied renters who rebook and share their experience with others. 

SATURATION

While it would be easy to look at a booming area where everyone is converting to short-term rentals and think it would be great to ride the same wave, you are right.  Markets with a lot of short-term rentals are strong for this very reason and should give you the confidence to at least try your hand. Competition should ignite your creativity, so if you do decide to convert your property in a saturated area it is critical to find a way to make your property stand out.  Maybe it’s time to complete those upgrades you’ve been putting off.  Or you may need to commit some extra marketing dollars to make sure your property has that “it” factor that makes it more desirable.  If being in a saturated market scares, maybe you look to create a more rural opportunity experience. I have a friend that has taken their 5-acre rural property and created an “Old West” type of experience for their guests, and they have a massive waiting list of people who want to spend their time and money with them.  There is no perfect formula for determining how many are too many short-term rentals in an area, but with effort and your expert insight you can successfully make the jump. 

A few other items to consider: 1) Always check with your HOA before you even start down the road to see what the rules are in regard to short-term rentals. I’ve heard too many horror stories about owners spending time and money to prepare a property only to have it shut down by their HOA. 2) There is no reason to fear the managing/cleaning/scheduling of the property. This is the number one thing I hear from investors, but it really is a non-factor. In short-term, your renter pays the cleaning fee. You just need to find a cleaning crew you can depend on. Take their bid, add $50.00 to it to pay for toilet paper, paper towels, and other disposable goods. A well-paid cleaner is more than happy to go the extra mile for you when needed.

While I am not advocating you run out and convert your entire portfolio today, I do recommend you run through your portfolio to determine which, if any, of your properties are ideal for creating a 6x return over what you are getting now.  It may take a little trial and error to get it right, but with considerable returns on the line, now may be your time to shine in the short-term rental market.  If there were such a thing as “instant” housing then short-term rentals would likely fall into that category and unlike everything else, can turn out to be better than the original.

David Pickron is a Landlord (short & long term rentals) and President of Rent Perfect.  Their Online Lease Agreement allows you to send your tenant(s) a customized lease agreement, electronically & securely. They offer the most accurate & thorough credit & background screening available. Members of National REIA can take advantage of special pricing from RentPerfect; the solution for rental property owners and managers for screening & managing tenants.  Learn more by visiting www.rentperfect.com.

By David Pickron

Like most of you, when I was in college, funds were tight.  Even as an underexperienced money manager, I knew had to prioritize what bills were going to get paid and when.  A memory that clearly sticks with me is walking to my car only to discover I had an unplanned expense, a flat tire.  After arriving at the tire shop, I added up the cost of four new tires and realized that they were going cost my entire monthly budget.  Decision time: I chose to only replace the tire that went flat.  Everyday after that I would inspect the three-remaining well-worn, quickly balding tires and skip over the new one.  This created a habit for the next four years, replacing only the tires that got my full attention…the flat ones.

Many of our renters are facing a similar choice in today’s tumultuous and unpredictable climate.  With layoffs, furloughs, and job uncertainty, there is often not enough money and too many bills or financial responsibilities.  They are faced with the choice of paying the car payment or paying the rent.  With a new eviction moratorium in place, the choice got easier for many tenants as they see it as a protection for their housing and choose to pay other bills first.  It begs the question, “how do I make myself and receiving my rent a priority,” just like the flat tire that stopped my car cold back in the days.

There is a reason saying like “the squeaky wheel gets the grease” and “out of sight out of mind” are as relevant today as the day they were coined.  The fact is human beings prioritize so you need to be a little squeaky and stay in front of your tenant at least once a month, whether they are paying you rent or not.

One successful strategy I have incorporated are monthly inspections.  After serving the proper notice, I inspect the property on the 25^th of the month or five days before rent is due.  Here’s my reasoning:

1. The 25^th is about the date that most tenants start thinking about their rent that is due on the first.  They have either just been paid or have a paycheck coming.  I want them to see me and remember that they need to pay me, their landlord.  I explain to all my tenants, whether they are current or not, that I might have to sell the house if I don’t get rent.  I am inspecting so I know what needs to be fixed or updated in case I must sell.
2. With more and more people being home from work and out of school, many people have made choices that might be a violation of the original lease agreement. Animal rescues doubled this year due to being home more often and I have a no pets policy.  People have been moving in with others to save money and you might even suspect that you have an unauthorized resident.  It is not unusual to walk in an see a bong or other drug paraphernalia on the coffee table.  If I know what is going on in my house, I have a remedy for eviction for lease violations that the CDC order does not protect the tenants from.

I had one attendee on a Zoom call this week ask if she had to do this?  That’s something for you to decide but you must consider, would you rather spend 20 minutes of your time to ensure you are a priority each month, or worry about not being able to pay your mortgage all month?

2020 has been a year where we all have had to work a little differently, oftentimes harder, to assure our continued success.  If you want your rent, let your tenants know there are still consequences to not paying rent.  Jump up and down and be seen; you are the priority.  If you go flat like my tire did, you might end up stranded.

David Pickron is a Landlord and Owner of Rent Perfect.  Their Online Lease Agreement allows you to send your tenant(s) a customized lease agreement, electronically & securely. They offer the most accurate & thorough credit & background screening available. Members of National REIA can take advantage of special pricing from RentPerfect; the solution for rental property owners and managers for screening & managing tenants.  Learn more by visiting www.rentperfect.com or calling 1-877-922-2547.

by David Pickron

Landlords, it’s time we all pay very close attention.  A second devastating wave of trouble is thundering towards us and it is imperative that you know how to protect yourselves and your investments.  On July 26, 2020, the 120 days of eviction relief provided by the Cares Act expired.  With that, landlords across the United States were given the green light to start the eviction process for non-payment of rent, with the caveat of having to use a special 30-day notice as required by the act.  We are seeing that landlords are generating notices with $4000-$8000 demands for the last several months of unpaid rent, begging the question that if they couldn’t afford $1000 a month rent, what makes us think they can come up with $4000 to make the landlord whole?  It appears that tenants interpreted the eviction moratorium as “we do not have to pay rent,” which could not be further from the truth.  So, what happens now?

Over the next 30 days, if the Cares Act is not extended, thousands of people in your area face being evicted and receiving a judgement against them for thousands of dollars.  These costly judgments had to come from somewhere to help the landlords who carried their loans and their unpaying tenants for months.  For many landlords, the burden was too great, and they did not survive carrying these unexpected costs.  The Cares Act also gave businesses large PPP loans to cover employee pay, and those that were unemployed collected more than they would have if they worked, all to help people cover their expenses.  What did the struggling landlord get from the Cares Act?  Nothing but their properties “seized” by the Federal government if they had a loan backed by Fannie Mae or other government backed loan (something the landlord did not ask for) and told they could not make decisions for properties they own.  This has resulted in landlords who are financially stretched and a pool of potential tenants that are not all that dependable.

COVID has had a significant impact on our society but it is by no means the first time that people have endured challenging situations.  Everyday people deal with illness, cancer, and other diseases and disabilities that are terribly unfortunate.  In the past, tenants that have struggled with these types of  issues  have leaned on family, savings, or churches to help them make ends meet.  With the Cares Act, the landlord was the one forced to carry the bill.  We have been beat up enough and the struggle is not over.  The current pool of potential applicants in the next 30 days will have evictions and judgments against them that can hurt you.  Here is how to protect yourselves:

1. Call your screening company and make sure they search for eviction records in your local jurisdiction and in the jurisdiction your applicant has lived. Credit bureaus removed eviction and judgement data from their reports last year, so the only way you can find a civil eviction record is for your screening company to go right to the court.  Keep in mind, since these are off the credit bureaus, these evictions will not affect credit scores.
2. Ask for proof of payment of rent for the last 4 months through bank statements or cancelled checks. Do not fall for they were living with family and did not have to pay rent.
3. Give good landlord verifications. What that means is when you are asked about a current or former tenant, stick to fact-based answers, and stay away from sharing your personal, biased opinion of the people.  A factual question you can answer and provide backup for is “Has your current tenant paid his or her last few months of rent?”  Simple question with a simple answer of yes or no.  We need to protect each other so no one gets hurt again and that can happen when we ask for and provide good landlord verifications.

Right now, the collection companies are salivating over these new, large judgments to collect on.  If you rent to a person who has a judgment, chances are they will be garnished at every job they apply, leaving them with less money to pay you rent.  With the “free money” mentality and the ability to obtain a residence after their first eviction, they might consider making the smaller car payment over the larger rent payment and take a chance that a second eviction won’t hurt them either.  As a landlord, you don’t want to experience the pain all over again.

I do not want to see any fellow landlord be victimized again.  We are good people who have been responsible enough to be able to provide housing across this country to millions of people.  For the most part we are all not rich, but rather are living simple responsible lives, trying to get ahead a little and raise our families.  More than ever we must band together to survive in an environment that has been stacked against us by our legislatures and tenants.  Together we can weather the storm and come out of this a stronger and more unified group.

The secret to being successful in this business is finding the right tenant or what I call “business partner” and proper screening is one way to beat the challenges ahead, including bad legislation put out by our government under the guise of Cares.

David Pickron is a Landlord and Owner of Rent Perfect.  Their Online Lease Agreement allows you to send your tenant(s) a customized lease agreement, electronically & securely. They offer the most accurate & thorough credit & background screening available. Members of National REIA can take advantage of special pricing from RentPerfect; the solution for rental property owners and managers for screening & managing tenants.  Learn more by visiting www.rentperfect.com or calling 1-877-922-2547.

by David Pickron

We have all heard the phrase “live in the present and forget about the past,” but rarely do we hear the opposite of that.  Currently we are in a challenging situation in regard to managing our properties and are being forced to do things in unfamiliar ways.  Social distancing has changed the way we show properties, perform move-in and move-out inspections and have work orders completed.  Those are easy accommodations to make when we consider the larger and more longstanding economic issues that will drastically impact our industry.

Our present-day situation is an intriguing one, overflowing with a variety of unanswered and possibly unanswerable questions.  Although we have been enjoying one of the greatest economic runs in history, things have and will continue to change.  We are exchanging record low unemployment numbers with 26 million unemployment claims, and more on the horizon.  Businesses have been forced to close by State governments to stop the spread of Covid 19.  And all of this directly impacts our industry as State Governors and the Federal Cares Act have prohibited evictions on federally backed loans for 120 days.  Come July 26, 2020, we may see an overwhelming onslaught of evictions in numbers we could have never imagined even 2 months ago.  If a tenant could not pay their normal rent during the 4-month reprieve from evictions, what makes us think that they will be able to come current with 3 to 4 months of back-owed rent when the time arises.

Looking ahead, we must ask ourselves this question:  Is an eviction from April 2020 to August 2020 the same as an eviction a year ago?  We would be challenged to honestly answer “yes” to this question.  As we consider tenants for our properties over possibly the next few years, we will need to consider both the past and the present, giving proper weight to the circumstances many of us will be in by no choice of our own.  Professionally, I recommend putting more weight into these three areas as you qualify your applicants.

1. Pay attention to time.  How were the applicants doing prior to March of 2020?  Did they have any blemishes or evictions in the last year?  Did they have any judgments or negative credit activity prior to Covid?  Would you have rented to them in February 2020?
2. Analyze their employment. Were they employed throughout the Covid shutdown but still had an eviction?  Maybe they took advantage of the situation when it was presented to them and stopped paying rent to stockpile cash.  That is much different from a restaurant worker whose job was taken from them by government mandate.  No matter what the situation is, can they pay their rent today?  Do they have a current stable job moving forward?  Always review their paycheck stubs, focusing on Year to Date totals, to get an idea how long they have been working.  A call to the employer might be necessary if a paycheck stub cannot be produced.  I personally ask for 2 paycheck stubs.  Its easy to doctor up one, but to change two paycheck stubs and make all the YTD figures match is often too much work for a scam artist.  An emergency room nurse in my neighborhood was furloughed by the local hospital because no one was coming to the ER.  You might think all medical personnel would have retained employment, but with elective surgeries stopped by most governors, all trades were affected, not just restaurants, tattoo shops and bowling alleys.  An applicant with a steady employment history  through these times is going to be a “diamond in the rough” in the rental world for the next few years.
3. Always perform a rental verification. A good rental verification will give you information a credit bureau cannot.  Last year eviction data was removed from credit bureaus.  There are only two ways to find evictions now.  One is through a direct court search of civil filings, and the other is by calling past landlords.  Many landlords have been coached by their attorney to only provide “move in-move out” data, while other landlords will give you more than you want.  Most of the time if a landlord did not get their rent, they want to protect other landlords and will share lack of payment information about a renter.  Always be cautious when contacting a current landlord because if a tenant is really bad, they will say anything to get rid of them.  I always advise my clients to go back at least two landlords to get the most honest and helpful feedback; a past landlord has nothing to lose and the truth will come out.

Following the financial crisis of 2009 over a decade ago, I took a chance on renting to 3 individual families that lost their homes to foreclosure.  It is encouraging to report that they are still with me today, over 10 years later.  Using these three principles we have discussed, I found people with a “homeowner mentality” who needed to rent my investment properties.  They went through a tough time with their own homes being underwater and eventually lost them.  To their credit,  they kept their heads high, knowing that they were caught up in forces outside their control.  We will find people in the same situation here.  Will good people get caught up in this mess?  Yes.  Will many of them be great renters in the future?  Yes.  So maybe it is time to look to the past and forget the present when identifying the people that will be paying you rent for the next 5 years.

David Pickron is a Landlord and Owner of Rent Perfect.  Their Online Lease Agreement allows you to send your tenant(s) a customized lease agreement, electronically & securely. They offer the most accurate & thorough credit & background screening available. Members of National REIA can take advantage of special pricing from RentPerfect; the solution for rental property owners and managers for screening & managing tenants.  Learn more by visiting www.rentperfect.com or calling 1-877-922-2547.

by David Pickron

It’s a scenario we are all familiar with, the rental car inspection process prior to receiving the keys.  Think back to the last time you were asked to walk around the vehicle with your half sheet of paper with the car diagram on it, looking for any existing problems.  To avoid getting charged for damages that aren’t your fault, you dutifully circle the car, notating every scratch and ding.  Why does the rental agency  require this?  To protect their investment.  Period.  When it comes to your investment property, do you take similar steps to ensure that your property is delivered back to you in the same condition as when you rented it?  The average car rental is 3 days and it is sometimes hard to remember what was there at the time of possession.  Imagine how much more difficult it is to remember the condition of your much larger asset after a 3-year lease. Will you accurately remember every room, wall, faucet, light fixture, appliance, flooring and everything else?

Pictures and forms are great, but where do I store them so I can easily access them when my tenants decide to move out?  Truthfully, the whole process is a pain and most landlords drop the ball in their move in, move out inspections, ultimately costing them money at the end of each lease.  No one gets into business to lose money (at least not anyone that expects to last long as an investor).  It’s not a question of should we do move in, move out inspections, but rather how we should do them.

As a landlord, for years I paid for damages created by tenants because it was easier to pay the bill than it was to fight over who was at fault.  I realized that I had no leg to stand on because I had no real evidence.  When something causes me pain, I look for a way to get rid of the pain.  I became laser focused on creating a solution that would be both easy and effective.  The result… Introducing MI-MO, Rent Perfect’s Move-In, Move-Out process, found inside your Rent Perfect Portal next to our other innovative products like tenant invites, online lease creation and more.

Here’s how it works:  MI-MO starts with the new tenant receiving an invite through Rent Perfect to inspect the property.  They inspect each room and accept everything that is in good working order.  If something needs to be repaired, they take a picture of it with their phone and document the needed repair.  They  repeat the process throughout the home and after completion, you receive a notification to login to your Rent Perfect Portal and review their inspection.  You have the option to either note the damage or fix the problem.  Rent Perfect stores the inspection notes and accompanying pictures for the duration of your rental contract, no matter how long your tenant lives there.  During your inspection of the property at move out you have photographic evidence of the condition of the property at time of occupancy.  Find something wrong?  Take a picture and it will automatically upload into the Rent Perfect system.  You can easily compare the property condition and adjust the refunding of the security deposit based entirely on the difference in the property at move-in and move-out.

The whole goal is to prevent a situation where it is your word against the tenant.  MI-MO will allow you to be transparent and your tenants will love that.  Rent Perfect just took one more unnecessary fight away from the rental relationship game.  I guess we can thank the rental car industry for doing something right.

Editor’s note:  Members of National REIA can take advantage of special pricing from RentPerfect; the solution for rental property owners and managers for screening & managing tenants.

About the Author:

David Pickron has been a licensed private investigator for over 20 years, specializing in tenant screening for real estate investment owners and property management companies. His company, Rent Perfect, an Investigative Screening Company, helps clients onboard tenants from the initial background check to leasing and payment collection. You can learn more by visiting www.rentperfect.com or calling 1-877-922-2547.

by David Pickron