Tuesday, March 31, 2009

The Latest Surreal Phone Call

Mrs. 508's outlook is looking up! Now, before we go any farther, can we all take just a moment to knock on wood that I didn't just jinx it. I am not a superstitious person by nature--or I wasn't one until I met Mrs. 508.

Not only is Mrs. 508 doing much better (she had a lot to share with me--very little was related to the rental home or her rent), but she wanted to know if she could pay me next month's rent in advance! I believe my answer was "yes." Or at least I hope I said that after the smelling salts were administered.

Mrs. 508 also tells me the couch sitting in her yard will be gone sometime soon. I hope so. But, lucky for her, I don't have the energy to deal with non-immaculate tenants who pay early.

Monday, March 30, 2009

Surprise

To say Mrs. Martin was flabbergasted she was served is an understatement.

Because she will only text me, I can't really have a meaningful, insightful conversation with her. Which is fine by me. I don't really have much in the meaningful category to add at this point.

The one major point of her text was that she sent her rent check out on Sunday (insert raised skeptical eye here). If that is the case, Mrs. Martin will get to stay until we go through this maddening game the next time.

What blows me away is from what I can tell, she never expected me to "turn on her." In fact, that is how she phrased it. I am not sure what that means exactly. Was I supposed to sit back and let her take advantage of me? Was I supposed to accept her excuses? In her text, she told me that she "guesses" she will "stay current" until she can find a place to live. What a novel idea!

Except I think the "find a place to live" comment was a veiled threat that she was planning to move out. Darn! No more games with Mrs. Martin. Well, if she leaves the place clean and I find a renter right away, I may not even garnish her wages. If not, all bets are off.

Sunday, March 29, 2009

Imaculate

A friend commented I mention my good tenants keep the exterior of their homes immaculate. I hadn't really thought of the implications to that until she pointed it out.

When I drive by, I check at how the property looks compared to the neighborhood. I don't want my homes looking like the rental abomination on the street. I don't get to see the inside of the property unless I have a contractor go over or I am somehow invited in. So, I can only make guesses based on what I can see from the street.

So, "immaculate" means the yard is well-kept. There aren't dead cars or dead science projects visible in the back yard. The property isn't overrun with weeds two feet high. Rats are an issue in Birmingham and they like to live in tall grass. When they get hungry the move out of the tall grass and into homes. It means the neighbors aren't complaining about an eyesore of a home. From what I can tell, the place doesn't need major repairs from neglect or the tenant running their car into a fence or exterior wall.

If the house is lived-in on the inside, I am totally fine with that. My house is lived-in!

I just don't want the place to look like it is falling apart. I want to keep my investments in good condition.

Friday, March 27, 2009

The Truth Will Set You Free (of a Place to Live)

A few weeks ago Mrs. Martin voluntarily told me she was sending the rent. When it never showed up, she said she was sending a second rent check, because I never received the first.

What are the odds we believe cash-strapped untruthful Mrs. Martin really did just happen to pop a "second check" in the mail? Maybe slightly higher than a blizzard here in Mesa Arizona next August?

On Thursday I texted Mrs. Martin (because she refuses to take my calls or respond to my e-mail) to ask what day she sent the second check. I got a slightly incoherent text back saying she owed someone money so she will send the full rent next week on payday.

Yea she owes someone money. Me! And maybe the only person she should feel a greater responsibility to paying first is maybe Guido the Knee-Breaking Loan Shark. Maybe. As a mother, I have to tell you, I would pay for the roof over my kids' heads first before I paid Guido. But, that is just me.

But no matter, Mrs. Martin sealed her own fate with that note of truthfulness. I am not running a charity. My patience packed its bags and left town months ago. Instead I opted to show her exactly what I thought of her tremendous display of honesty and lack of regard for a place to live. She is being served an eviction notice.

By Alabama law, she has 10 days to get me the rent--which happens to fall into the timeline she has promised it to me. If I don't get it, we all know what happens then.

Whoppers

Very early in my Alabama landlord career, Mr. Smith told me he deposited his rent--in cash--into my bank account. The money didn't show in my account. When I asked him about it, he told me that he couldn't find the receipt but assured me the money was there.

After the bank searched for two days, they couldn't trace that transaction. I brought this to Mr. Smith's attention. He offered to redeposit the money into my account (this time with a cashier's check and he gave me a receipt). He calmly explained when the first rent money he deposited finally showed up, just let him know and I could pay him back.

Now, if the bank lost that kind of money, I wouldn't be that calm. I would be raising all kinds of hell. Not Mr. Smith. He never flinched.

When this happened, I marveled at how someone could blatently lie and expect to get away with it. Knowing him the way I do, I am certain he really thought I believed his story--and still do.

There is no point in questioning the integrity of a liar. You already know the answer. Instead of Mr. Smith just saying, "Hey, I will get you the rent three days later" (which is what this ordeal amounted to), he told a whopper, completely discrediting himself, damaging any future relationship and ensuring I thought him a liar.

Most of my tenants tell the truth about rent. I am more likely to hear, "I will get it to you Tuesday" than I am to hear, "I sent it" when they really didn't. If they just aren't going to pay up, they don't call me back or go to any effort.

I will rarely call someone a liar. And, I am darn sure of this standing before I do. I don't believe for a moment Mrs. Martin sent me a check a couple of weeks ago like she said she did. She may have sent one last week. Or, she may have sent one this week after I suggested in my voice mail that she was a bit lacking on the truth. If I am wrong, I will post it.

The difference between Mr. Smith and Mrs. Martin is that Mrs. Martin didn't start out this way. There was a time when if she said something, it was true. Now her credibiity is gone. She may have the best of intentions. And she may be on the straight and narrow path from this point forward. But, I will never know. She will always be from here on out, a tenant who didn't tell the truth.

Thursday, March 26, 2009

I So Need a *^%@* Vacation

Wednesday, I sent an exaggeratedly terse e-mail to a mortgagee I never hear from, accusing them of not being current. Apparently they are. Oops. My bad. Yes, I apologized. Yes I am an idiot. Yes, I need a vacation.

Wednesday, March 25, 2009

Good Bye to Him and Good Luck to Us

My current favorite tenant is leaving--which looses him favorite tenant status. He rents out the house Jack and I own together. He is one of my favorites because his rent is always early, he doesn't call me when the bathroom towel bar falls off and every time I drive by the place is immaculate.

He is leaving for financial reasons. And, he has been pretty great about the whole thing, offering to clean it before he goes and even offering to show it.

I don't want him showing it to potential tenants. Who knows if I am his favorite landlord. Or, if he has a long-standing personality issue with Jack. Or if the dishwasher never worked right and he forgot to mention it and bothers to tell the new potential tenant. Or if he manipulated me somehow and I didn't know it and here are some potential tips for the next tenant. But the real reason is Jack and I are licensed agents and we want to keep our licenses. That means we show it--or more to the point, Jack shows it. Safer that way.

Jack has already listed the house on Craig's list and put it on our own web site. Hopefully it won't be vacant too long.

Tuesday, March 24, 2009

The Belligerent Toddlers

I am convinced that my motherhood training has ultimately led me to this moment--dealing with my terrible twosome. Just like my own kids, one needs a stronger hand, one needs a gentler hand, same with Mr. Richards and Mrs. Martin.

I heard from both tenants on Monday. Mr. Richards called to tell me yes, he sent the rent. Here is when I could expect the next installment. As far as he was concered, he was ready for me to give him a gold star.

I also heard from Mrs. Martin, who, like every other month for the past several, can't seem to figure out where the stamp goes on the envelope, what my mailing address happens to be and where a post office is located in her city.

However, yesterday's voice mail apparently scared her enough that she is now going to send me a "second check" which is a loan from her parents. The "second check" is because I didn't get the "first check" that she voluntarily said she sent two weeks ago and I still haven't received. I should get this "second check" later this week. And, would I please call her immediately when this "second check" comes in because she would like to leave the time-out corner.

Monday, March 23, 2009

Ok, This Wasn't Me

Just for the record...

A woman called Dave Ramsey's radio show today. She has 14 properties in Birmingham Alabama and was at the end of her rope. She had a lot of drama around her situation. Things are breaking. Renters are not paying. Property values have dropped. She was ready to "give up" and go bankrupt. Her call to Dave Ramsey was to ask what she should do.

I did not make this call. I have mostly good renters. I am not giving up--even if property values are down. My drama is condensed to Ms. Betty's latest antics. If all else fails, I have my theraputic blog.

I don't know the ins and outs of her situation, but I suspect there is more to her story and her decisions than the two minute call. All the best to her.

Southern Speak

I can't believe I said this.

While speaking to James, the Hell's-Angels-Turned-Carpet-Installer today, I was telling him I want a quote on my soon to be vacant home. I said, "My tenant is moving out in a few weeks. So, sit tight and I will holler at you in due time."

The Terrible Twosome

As I am writing this, it is quite possible my three readers will deem me stupid or naive or both. It isn't that they wouldn't be accurate. Those thoughts certainly have gone through my mind.

However, there is a method to my madness. Essentially: it is easier to threaten, cajole and badger than it is to pay for an eviction. Besides, experience tells me everything seems to work out in the long run. Though not always in my favor.

Last Friday I woke up with the same feeling of dread I always get when I have to deal with Mrs. Martin and Mr. Richards. My real feeling is Mr. Richards will be ok. Only if I nag him to the point he pays up. The jury is out on Mrs. Martin.

Mr. Richards was supposed to pay me the latest installment of rent on the 20th (yes, he has paid me since my last posting about him). On Friday I called to confirm it was coming. I still haven't heard back. I called again today and repeated my message, also reiterating if I did not hear from him I would have him served and that would cost him as well. So, call back and tell me you sent it or give me a ton of excuses as to why not. Just call back.

When I call Mr. Richards, I am always very careful to be polite. Even when I am seriously annoyed, I am polite. My feeling is once the gloves are off with this man, the relationship will immediately deteriorate. So, if I keep it cordial, I have a better chance of accomplishing my goal: get rent or get him out. And, I don't really care which one right now.

Mr. Richards hasn't called me back as of yet. For all I know, there is a check waiting in my PO Box. Which is fine. He isn't my most annoying tenant as of today. So, until he hits that point, he can limp along. But the writing is on the wall. And we all know it.

Mrs. Martin is a whole different story. She was caught up (more or less) and then rent came due again. The day rent was due, she sent me an e-mail saying she was sending half of it and the rest at the end of the month. I haven't gotten the first half. If she hadn't purposely told me she was sending money she wasn't intending to send, I would feel much better about her. But, to intentionally mislead me puts her in the same category as Mr. Smith.

I called Mrs. Martin this morning. Someone picked up and immediately the phone disconnected. Hm... I suspect she has caller ID. I called again and left a voice mail for her. As cordial as I am keeping Mr. Richards, I am not paying Mrs. Martin the same courtesy. Mr. Richards didn't lie to me about sending money. Besides, Mrs. Martin is the type who needs her butt kicked.

In my voice mail (which probably will be deleted without her listening to it) I told Mrs. Martin that I was through "working with" her. And, I would appreciate a call back to find out if she was moving out or if she was going to send the money like she said she would. I am sure I won't hear from her. She is getting served. The writing is on the wall for Mrs. Martin too. And, I am ready for that one to end.

Thursday, March 19, 2009

I Always Ask

By the way, one of the great things about having vendors who know you is that they will give you an inside scoop on your tenants.

For example, last week when Clay was working on the air conditioner at Mrs. Waterford's home, he gave me a report. Mrs. Waterford's home is clean, well kept up. The air filter was changed. The dog hasn't destroyed the yard and the carpets are immaculate.

I asked.

Wednesday, March 18, 2009

Note to Tenants:

Dear Tenants,

Arizona doesn't acknowledge daylight savings. Please understand, when you called in the past few months at 8 a.m. your time, it was 7 a.m. my time. Now when you call at 8 a.m. it is 6 a.m.

At 7 a.m. in my home, only Marty Sunshine is moving around. He isn't always cheerful at that hour. At 6 a.m. Marty is going to make me answer the phone. I guarantee I won't be cheerful. Please consider this your warning.

Thank you,
The Landord

Tuesday, March 17, 2009

Ms. Popularity

Yesterday morning, I was one popular landlord.

One of my favorite tenants is moving out. Drat! I am sorry to see him go. He wants out of his lease early because essentially he can't afford the rent any more. I like this scenario a lot better than having me hunt him down next month when he is hard on his luck. Or worse, him deciding just to live there indefinitely for free.

Before I gave him an answer, I asked him some basic questions: What kind of condition could I expect to find the house in when they move out? Were there any repairs? Did the dog do any damage I should know about? Were there any unfortunate bathroom fires that were never reported? Was there a meth lab in the garage I need to know about before I re-rent the house? You know, the very basics.

Yes, I will let him out of the lease. But, I won't give him his deposits back. He is breaking the lease.

Also yesterday morning, Mrs. 508 called asking for advice. Apparently she thinks I moonlight as a counselor. She even told me I should. I happen to like Mrs. 508, so talking to her doesn't bother me. However, the real reason for her call was to confirm when the rent was really due (check the lease!).

Mr. Partner once mentioned contracts are for when times aren't good. Not for when times are easy. This is so true.

Incidentally, Mrs. 508 and I are now on the same page about the whole rent thing. Somehow, she was just under the mistaken illusion she had a few extra weeks before the rent came due. I am sure this happens all the time with tenants who have lived in my home for MORE THAN A YEAR. I can see how this can get confusing. Nevertheless, despite her delusions, Mrs. 508 is pretty ok.

I also got my weekly e-mail from Ms. Betty. This time the furnace isn't working right. But, I am sure Clay can handle it. Which is what I told her. Call his company.

The dishwasher delivery folks looking for Ms. Betty also called me from Ms. Betty's home. They couldn't get in touch with her. And, if they didn't hear from her in the next ten minutes they were hauling the dishwasher back to the store. Turns out she was in the house. I am pleased to say Ms. Betty got her dishwasher.

In addition to all this, Mr. Partner e-mailed me with tons of questions. When could he do his taxes? When would he be getting an update? When was the price of coconuts in Madagascar going back up? Ok, maybe not that last question. Maybe.

Monday, March 16, 2009

The PIA Factor

Lately, last week in particular, major home repairs have been the norm. It makes me wonder if I can expect the phone call at 2 a.m. saying the toilet overflowed. Now I would appreciate, before we go any further, if we could just stop for a moment and say a silent prayer that I don't get that phone call. Not that it would matter. It would go to voice mail.

I don't mind home repairs. Especially because I am not being expected to perform them. I can paint a wall or two. But, it is a bit of a stretch to ask me to install a dishwasher. Though I hate to say it, I probably could.

What I find interesting--especially when I talk with people who have thought about dabbling in rental properties--is last week's antics are what freak out potential landlords. I don't always think the panic is about the money they have to put out to fix these things. That, of course, is never fun. But more about the mind set that something is out of their control.

This past week there were a lot of repairs. Usually I have a repair every couple of months. I know it is just part of doing business. Maintenance happens. Just like if it were your own home or car. I would just appreciate if it didn't happen all in one week.

Last week:

Ms. Betty got her white, non-Bosch dishwasher. Except the major retailer I purchased it from won't install the damn thing (give you a hint: the employees wear orange aprons). Mr. Betty volunteered. I am going to let him. After all, if I think I can install it, how hard could it be?

Mrs. Waterford had some problem with the air conditioner that is too long and boring to explain in my patch of cyber space. In girl speak: it stopped working. Her repair took me by a surprise because the home (and air conditioner) wasn't that old. Nevertheless, I was able to call my buddy Clay the AC Guy who came to the rescue. Because I am such a good customer, he cut me a break when I asked him to reduce the price a bit.

The bees are back at Ms. Robin's now home. I haven't heard the overall solution to her dilema yet. I did hear Mr. Robin was stung. Sorry about that. Hopefully I will get some sort of answer of the best course of bee erratication soon.

Getting these repairs done weren't really that expensive in the grand scheme of things. Our rents cover the repairs (though don't leave for much else other than the mortgage payments). I have some expenses (or in the case of the dishwasher, a capital improvements) to deduct from taxes next year. And, because I acted quickly, I have happy tenants.

Thursday, March 12, 2009

His Final Offer

Mr. Richards wants a new lease.

He is using an unusual negotiation technique. It is akin to a teen ager telling his partents, ok... I will only borrow your car if I can be home by curfew, drive the speed limit and I insist on filling up the tank before I return the car to you. This is my final offer.

And, me saying, Ok, you will only borrow your car if you are home by curfew, drive the speed limit, fill up the tank and wash it before you return the car to me.

You see, Mr. Richard's lease isn't up. I have never fully grasped why he thinks this is the case. But if he wants a new lease. I am happy to oblidge. Because in his old lease, I didn't have the foresight to include remedies to Mr. Richard's-prone behaviors that drive me out of my mind.

In the mean-time, I am holding his new lease out of arm's reach, telling him I am waiting for the full rent to come in before I give in. As soon as he is caught up (which according to him is in a few weeks and so far he is doing really well with getting caught up), I will pass out his new and improved lease.

Wednesday, March 11, 2009

What am I Supposed to Do With This?

My quest to have ONE week without Ms. Betty contacting me failed again. On Sunday I got the following e-mail. This was the entire note:

We cleaned the whole building out and went to the dump the yard is clean we will cut the grass next weekend

Never have I had any tenants make a point to tell me when they are doing yard work. Except Mrs. 508--but that was a special circumstance--I asked.

All her grammar issues aside. Seriously, what am I supposed to do with this? Is there a hidden subtext? Is this a test? If I don't write back have I failed?

If I do write back and say something like, "Gee, good to know. Thanks" will that be the right thing to say? Will she feel the need to send me more rude e-mails if I don't say "Wow! Good for you!" with the right amount of enthusiasm?

And, why tell me about the lawn? We don't chat. We aren't friendly. And, I am not sure I even like her any more. I don't contact her when I am doing dishes. I don't see a need to share with her when I am folding laundry. All of this familiarity is weirding me out.

When I asked Marty what the correct thing to do was, he said, "post it on your blog."

Tuesday, March 10, 2009

News

Although I could bore you with tomes of drama related to Marty Sunshine's layoff and how running an accidental business in Alabama is affected by this, I won't. However, I will give you the highlights.

One highlight was watching the dawn of realization streak across Mr. Partner's face when he started adding up the realities: Business is seriously under capitalized + Marty Sunshine's job going away = HOLY COW! THERE IS NO SAFETY NET IF WE GET HIT WITH ANOTHER SET OF DEADBEATS LIKE WE DID LAST SUMMER.

Mr. Partner catching on was a relief. I didn't have to spell out the possible disaster scenarios to him. I had already gone through these things in my head a dozen times. I didn't want to vocalize them and have Mr. Partner add possible disaster scenarios I hadn't thought of.

The other highlight of our drama was when the company Marty works for offered him a job in Seattle. The one in Washington.

Just so you know, Seattle is MUCH farther from Alabama than Arizona is. Not only would we have the run-of-the mill annoyances that come with moving, we would have the added business related annoyances--like figuring out how to transfer my corporation to another state, changing the PO Box and the fact there are no banks in Seattle that are also located in Birmingham. So, even though Seattle sounds green and a lot cooler in the summer than it is here, it wasn't our first choice.

But, Marty never wavered. He was positive and upbeat. So it wasn't a surprise to him when he got offered another position with his company. This one in Mesa Arizona. We don't have to move. We don't have to uproot our lives. For the next year or so, we are staying put.

Monday, March 09, 2009

A Quick Tip

In the recent months, I added the following clause to my lease:

Any evidence of the manufacturing or sale of illegal substances on the premises or any arrest and conviction related to the manufacturing or sale of illegal substances will result in immediate termination of this lease. The tenant will be held financially responsible for the abatement and any legal costs related to the abatement of the property if illegal substances are found on the premises.


If you are a landlord, I recomend adding this to your lease. Meth labs are bad news. Cover your assets folks.

Friday, March 06, 2009

Stop the Madness

I am not exaggerating when I say Ms. Betty calls, or now e-mails, at least once a week (if I am lucky only once a week). There are a lot of annoying things that happen on a weekly basis. She is the most consistent of the annoying things.

Sometimes she isn't annoying. Sometimes she has legitimate issues. Like needing my address AGAIN today. Or the fact the dishwasher is leaking all over the floor. I can see those items as legit.

In the event you ever think you might want to rent to Ms. Betty, let me give you a snippet of a conversation a couple of months ago:

Ms. Betty: We need to get an electrician out here. The outlet in the bedroom doesn't work.
Me: What's wrong with it?
Ms. B: There is no electricity getting to the lamp.
Me: Have you replaced the bulb in the lamp?
Ms. B: No ma'am. I am sure it is the outlet.
Me: Could you try the bulb anyway just to be sure.
Ms. B: Yes ma'am. Hold on for a moment.
Me: Waiting... Humming to myself and wondering how much money I am spending on cell minutes
Ms. B: (returning to the phone hours later) Well, it looks like it was the bulb after all.

Her e-mail today gave me a chance to let her know that I may not make it to the bank in a timely manner next week, so it might be best to send a money order. She didn't rip my head off for that. Instead she took the liberty to tell me she priced stainless steel high end dishwashers for me. How nice. I was thinking more along the lines of something in the Amana/Kenmore variety. White.

Thursday, March 05, 2009

The Real Lessons from Fergie

I have two tenants right now who are teetering. To them, their situations are unique. But, really they aren't. I have seen both types of tenants fail before. And, I have seen both types succeed. Right now, with rent coming in and both being (more or less) upfront with me, I would put them closer to the succeed category. But not by much. All I really want is for them to pay or for them to voluntarily move out and clean up when they go. Either is fine by me.

I should clarify. I have other tenants who are also struggling, but they don't make it my problem.

Both of these people didn't start out teetering. Circumstances changed while they were living under my roof. Because they are my only two troublemakers, I take this as a positive sign that I am getting better at picking tenants.

There are people like Fergie, like Wayward, like the Good Pastor who have helped me along the way. They have made it possible for me to hone my tenant screening process. They have made it possible for me to continually perfect my ideal of what a good tenant looks like. I am sure there will be others who challenge my good tenant ideal, but I am getting much better at weeding the garden.

Through these experiences I have learned to set standards. I do not discriminate on any of the Federal Fair Housing protected classes. I do not know what color, religion or ethnicity my tenants are. Nobody is every going to be able to say I didn't rent to them because they were black, Hispanic or had purple polka-dots on their skin. I just don't know what these folks look like. And, I don't care.

I now have written standards that I use for screening. I look at debt ratios. If you bring home $2500 a month and are currently paying out more than 55 percent of that, you won't be renting to me. Your bills are too high. The likelihood you will be calling me one month telling me rent is late because you had to buy pencils is pretty high.

I look at what you have done to former landlords. If your credit is stellar but you have burned a landlord, you will never rent from me. Ever. This is something I started looking at in the past couple of years. If I had done this sooner, Wayward never would have rented from me. She had three evictions prior to mine. Now she has a monetary judgement against her and her wages are being garnished. I don't feel the least bit sad about this. I do call past landlords. With my most recent tenant, I called all of her past landlords. One said he was impressed at how thorough I was. I explained my logic. He told me he would start calling too. We landlords have to stick together.

I look at their history of paying. I do this by checking credit. A monetary judgement doesn't scare me. One of my best tenants right now has a monetary judgement from a hospital against her for a car accident several years earlier. She is paying it. That's why she is renting.

Of course things happen to put one in this situation. And, yes, I do take into consideration life events that change and cause great strife. I do understand people die, there are divorces and there are job losses. I get that. I have always been sympathetic to this. I am not talking about those folks.

I am talking about the ones who don't have realistic expecations about paying their bills. What I don't like to see is lots of monetary judgements for little things. If you have judgements against you from the cellphone company, the power company and the credit card company, you probably are going to struggle to pay the rent. And, you are telling me your credit score and personal integrity aren't that important to you. You are also telling me I can expect you not to leave if you can't pay your way. I have enough drama in my life right now, thankyouverymuch.

Wednesday, March 04, 2009

The Fergie Subtext

It isn't that I am self righteous about money. I am just naive. If someone tells me they have to make a decision between a package of pencils or their rent, I take this literally.

It wasn't until very recently I understood what all of my tenants who gave me these kinds of excuses really were saying. These folks didn't want to come out and say, they just didn't have the rent money. But that was the gist.

Now I understand. When they called me with lame excuses, I would make unhelpful suggestions. "Couldn't your kids just use an old pencil or buy one pencil for a quarter from the school's librarian?" I really thought I was being helpful. After all, if they could get this little dilemma resolved, I would have my rent money and all of us would be happy.

If I searched the Internet, I would probably find somewhere a handy guide on how to dodge the landlord when the rent is due. Perhaps there is even a blog such as this one, covering this particular topic.

However, assuming that all of the tenants of the world in Fergie's situation world aren't in cahoots, I think there is a certain amount of predictable human behavior that goes along with being in a situation where you can't pay your rent. Tenants who are short tend to over promise and under deliver. Once they have used that ploy up (because if they follow through, they can use it again), they start avoiding the landlord. I believe the thinking goes like this, if I don't answer the door/phone/telepathic signals, the landlord will just forget all about me. It isn't a character flaw. These tenants just don't feel they have any other recourse.

Most of the ones who struggle are just trying to work their way out of the hole they have dug. Generally they are optimistic--and borderline unrealistic--about their chances. Instead of just cutting their losses, they stay. It is easier to stay and work something out with the landlord than to uproot their family and scrape together new rental and utility deposits.

These particular folks aren't deadbeats in my book until they stop trying and start living in my home for free. The transition happens once the mindset becomes "landlord must be rich and I am going to stay here until the sheriff comes and kicks me out" game. Those folks are the deadbeats.

Tuesday, March 03, 2009

The Fergie Basics

Fergie was my second bad tenant. The first only lasted two months and I don't remember her being annoying. Even as green as Marty and I were, neither of us expected our first tenant to last. Fortunately, she didn't.

Fergie, however, was a trip. As it was inconceivable to me how someone could put school supplies over a place for their children, I just did not get her. Now of course, I understand better. What she was really saying was she put all her other bills and expenses--including pencils--in front of her ability to pay rent. Essentially, there was a lot of month left over after her pay check.

I am glad Fergie was an Arizona tenant, because I think I would have gone over the emotional edge if this were my first true experience with a bad tenant and I was remote. Bad tenants eat up more of my emotional energy. They require more handholding. More prodding. More phone calls. Essentially, bad tenants really suck. But because Fergie was local, it was easier to get in touch with her. The times I showed up on her doorstep were a shock. It isn't as easy to waltz over to Mr. Richard's house from here and bang on his door.

I learned a lot from Fergie. I learned never to allow a tenant access to my bank account. For example, because Fergie lived about 30 miles away, I thought it would be easier if Fergie could directly deposit her rent money into my bank account once a month than me wait for her to mail the check. We banked at the same place, how much of a pain could this be? Fergie, who understood the system better than I, realized if she put in a portion of her rent payment into my bank account, that was the same as me accepting a partial rent payment.

A quick word to the wise: according to Legal Eagle and the Arizona Landlord Tenant Act, if a landlord deposits a partial payment from a tenant, it is the landlord agreeing to a reduced rent. Essentially, all bets are off. The tenant gets to stay another month.

So, if Fergie was short, she would put in half the rent money into my bank account and then call me at some obscure hour when she knew she would get my voice mail to tell me the rest was coming in two weeks. If it didn't come, there wasn't much I could do about it. In truth, it always came. Fortunately, Fergie was good about that. But, her methods had me over a barrel. Obviously in hind-sight I should have closed the account and stopped this.

I also learned a lot about tenant law. At one point, Fergie left me a voice mail (at the aforementioned obscure hour), telling me she was giving me 30 days notice she was leaving. She informed me she was expecting her deposits back.

After frantically looking up landlord-tenant law, I was able to explain to Fergie that she was in a lease. Therefore, she was obligated to fulfill the terms of the lease and would owe me the rent money if she moved out. She also would not get her deposits back if she broke the lease. Fergie called back at a reasonable hour and threatened to sue me if I didn't let her out of her lease. Of course her lawsuit had no grounds.

Let's have a moment down memory lane, shall we? Awe... Fergie was my first tenant who threatened to sue me. In case it matters, Ms. Betty, upset about her rent check not being cashed as soon as she would like, is the latest person to threaten to sue me. At any rate, I learned a valuable lesson about crazy deadbeat tenants. They threaten to sue. A lot. However, crazy tenants are generally in the wrong and have no money. Fergie was the only tenant I ever took this seriously from. And then only for about an hour.

I learned sometimes it is better just to let go. I eventually did let Fergie out of her lease. I had had enough. The games were getting old. And, I knew the house was worth a lot more than I paid for it. I wanted to sell.

Fergie ended up moving down the street. The landlord called to check out Fergie. I breathed a sigh of releif when the only thing the guy asked was did she leave the house clean. Yes! Yes she did. Three weeks later the new landlord called back to ask if Fergie was a flake. Yes. Yes she is. I remember him saying, "I guess I should have asked that before." Yes! Yes he should have.

Monday, March 02, 2009

Fergie

Fergie was actually one of my early tenants, brought to me through a friend of a friend of my tenant in my first rental home. This was the first home we bought with Vance. Her home, a newish four bedroom stuccoed drab beige home with a pink roof, was in a-then up and coming section of Phoenix, where she wanted to live to be near family and friends.

At the time I hooked up with Fergie, I didn't recognize the signs of a bad renter. I can honestly say, if Fergie and I crossed paths today, I wouldn't need her application to know she would be trouble. Now, I realize warning signs were bright enough to land a 747 on a foggy night.

Fergie was a single mother who wanted the best for her and her children. An opportunity came along for her to live in a home that was in her means--if she budgeted accordingly--and she took it.

I should say, Fergie really tried. That is, tried to keep the roof over her head and more to the point, tried my patience. The real issue was Fergie's lifestyle were much higher than her monthly income. I suspect there are many people I run across who fall into this category. I can spot them better now than I could then.

From about month three, Fergie would call every month some new crisis that would make the rent late. It was always something that, if she had put a roof for her children first in her priorities, would have kept her as a thorn in my side much longer.

My favorite excuse for why her rent was going to be late was when she called me to tell me she was short because she had to buy school supplies for her kids. “What school supplies do you need?” I had asked. Pencils. She replied. A pack of pencils didn’t cost a month’s rent, I pointed out.

Eventually, I let Fergie out of her lease. It saved me a lot of grief later on. And, it probably saved her a lot of heartache too. One of the really great things about her was she left me a clean house. And, it was the one Vance and I turned around with a great profit. That profit gave me other homes in Alabama. So, not only did I learn a considerable amount about property management from Fergie, I also was able to expand my business.

Sunday, March 01, 2009

Just for the Record

I had never been to Birmingham Alabama until after I purchased several rental homes there. (Someone recently asked).