Landlord 101 - The Rude Awakening
Who should become a landlord?
A landlord is an investor, a business woman
or man; whose goal is it increase their wealth though healthy
real estate investments. This is not an insecure person
who will force a tenant into another lease (year long) at the
expiration of the first one. A secure landlord will allow
a month to month occupancy after the first year's lease expires.
This kind of arrangement gives the tenant the freedom to move
out, without the financial obligation of another contract.
Not every homeowner should become a landlord.
If you enjoy being compassionate, caring, helpful to others, and
you believe
that every human being is good; then this is not the field nor career for
you. This job will make you hard, insensitive and
uncaring towards the vicissitudes of others.
If that is not who you want to be, then
sell your house and forget about renting it. Finding a good
tenant takes experience and for those who are religious add
a little
prayer and discernment to your skills.
How to recognize a bad tenant?
A bad tenant shows his/her true self within
the first 3 months by one or more of the following:
If a tenant is late the first time,
rookie landlords will forgive. And this just enables the
tenant to be late every month.
If the tenant is late a
second time, this tenant has a low priority
for paying rent.
If a landlords accepts a particle payment
of rent once, this will enable to tenant to make future particle
payments. A particle payment puts the tenant in
control. This tenant is telling you (the landlord) how much your
rental property
is worth.
How much money should a landlord have in
reserve?
A landlord should have savings for at least
3 months of rent to cover for delinquent payments. This way
the landlord will protect his/her credit and property from
foreclosure or bankruptcy.
So don't depend solely on a
tenant to pay your mortgage. If you do this you will be
giving the tenant too much power. If he/she fails to pay
or pays late, your credit will be jeopardized.
Stay in control, have some reserve cash.
Recovering a Monetary
Judgment for back Rent
After you win a rent
court decision for possession of your property and a monetary
judgment for rent due, and the tenant fails to pay; kindly click
the links below to see how you may proceed in getting some
compensation.
Small Claims Court
limit $5,000
Collecting a Judgment
information
Wage
Garnishment
you will be limited by federal law to 25% of the debtor’s
disposable income. Disposable income is the amount of
earnings left after deductions.
After I read the information on the above
pages, it was very clear that you would not want a tenant to get
too far behind in rent. The process to collect the balance
due is way too intricate and time assuming.
Tax Write-off
If your judgment is $4,000 or more, ask your accountant about
ways you can write-off your loss. Winning a judgment, does
not guarantee that you will be able to collect on a bad debt. If
you are able to write off your bad debt on your taxes, don't try
to collect the same money through wage garnishment.
This information is being provided to those who have retained my
services. It is not meant as
legal advice. Please consult an attorney for that.
Hiring a Property Manager
If you are new to being a landlord and
maintaining your good nature is important to you, then consider
hiring a property manager.
A property manager will manage your day to
day tenant complaints, screen potential renters, check their
credit and employers, verify income, file court documents,
process evictions, and deal with maintenance problems.
Should a letter be sent to a tenant who
is late paying rent.
No
Should you ask the tenant for your rent?
No
Should you stake out the tenant's home
and demand your rent?
No
If you do any of the above, you are getting
involved in the tenants life. A landlord keeps his/her
business affairs impersonal.
Another Choice Virtual Assistant Services is
willing to represent those needing a PG County Rent Court Agent,
Prince George’s County File and Serve Administrator, or on Site Eviction
Administrator (Monday – Friday).
