Flip Tip Summary
Placing the wrong tenant in your rental property can destroy your chance at profitablity. Pete Neubig shares this fantastic advice on how to make sure you’re finding great tenants. Don’t miss it!
Flip Tip Transcript:
Mike: Hey, it’s Mike Hambright from FlipNerd.com. We have a quick Expert Tip to share with you from Pete Neubig who’s going to share how getting the right person in your property leads to profits.
This Expert Tip is sponsored by RealtyMogul.com, B2R Finance, and AceBusinessFunding.com.
Pete: So as a property manager with Empire Industries, we have about a one percent eviction rate for over 450 doors. And the reason why we have this is we are very, very cognizant of putting the right person in your property. Here’s our policy and hopefully you can take this policy with you.
Once you get the right person in your property, you will make profit. So the first thing is have a written policy down. Make sure you have a policy and a process. The next thing would be have qualifications. For example, what’s the level of income you need to take? Is it two times the amount or three times the amount or two and a half times? Are you going to take felons? How old are the felons going to be? Are you taking misdemeanors? And so, how old are the misdemeanors going to be?
Are you going to look at credit? Is there a credit score? If the credit score is below a certain amount, are you going to charge a risk fee? A credit risk fee? Or are you going to charge a double deposit? How do you calculate the credit score if both people have credit scores do you add them and divide by two, or do you just take the best one?
If they owe money, who do they owe money to? Is it AT&T because they didn’t pay a cell phone bill, or is it a property management company or an apartment complex? Not all delinquencies are equal. These are just some things. Are you going to take pets? If so, how much are you going to charge? These are some things. All of our qualifications, by the way, are on our website. You can go to our website and grab our qualifications. I think that would be a great start.
Do not deviate from your policy and from the qualifications, just because somebody that you like had a felony, and you just denied three felons and you take that felon, you are now open to fair housing. Please look it up, you need to know the seven protected classes. The big one these days, that most people get sued on is the disability class. It’s not a physical disability class. It’s actually a mental.
Did you know that PTSD is now protected? Did you know that they’re trying to get alcohol, I believe they’re trying or they’ve already succeeded, alcoholism and drug use is protected now, and that is a problem that they have. You have to be very careful.
You always want to make sure that whatever you do for one, you do for all. I think that’s the golden rule. Have a policy in place, have your qualifications, don’t deviate from them. Have the qualifications written out somewhere so that the applicants can see them as well. Only when they pass through your qualifications, then I would take them.
Mike: We’d like to thank Specialized IRA Services, National Real Estate Insurance Group, and VirtualStaffNow.com
Please note, the views and opinions expressed by the individuals in this program do not necessarily reflect those of FlipNerd.com or any of its partners, advertisers, or affiliates. Please consult professionals before making any investment or tax decisions, as real estate investing can be risky.