SOME OF OUR SECRETS.

Make your life simple. There are so many tools out there to simplify being a landlord. Here are a couple of our favorites. These tips and tools are straight from our adventures in landlording.

COZY.CO

We swear by it. The Cozy app and website have made our life so much easier. We have many apartments we manage. That's many rents to collect and manage. The majority of them are on COZY. It's a free app and website for landlords and tenants. We do credit and background checks from it. The applicant manages it, signs up, pays, and it shoots us a detailed credit report. It's super easy. If we accept them as a tenant, it rolls into an invitation for them to use the website. They sign up to pay their rent this way (at our suggestion). It automatically transfers rent to us at the beginning of every month straight from their bank account to ours. It also allows them to pay their RUBS to us mid-month as needed. We can see at any given time who has not yet paid. It deposits into our bank account before mortgages are paid. It's seamless and best of all, it's free.

RUBS

If you are a landlord and listing a new property or apartment, PLEASE make sure you know what RUBS is and then do it. It is a game changer. Ratio Utility Billing System is a process that allows landlords to re-bill their tenants for water usage as a % of the total bill (usually paid by property owners). Their % is allocated based on # of people living with them, # of fixtures (such as washer dryer, dishwasher, etc. If an apartment has more people, a washer dryer, or  a 2nd bathroom than another unit in the same building, that apartment pays a higher percent. We re-bill our tenants for water, sewage, and trash. The water combo bill averages about $250 every two months for a 4 plex in Los Angeles. If we have sprinklers or common water usage on the property, we pay a portion, roughly 10%. If not, we divide it up and have the tenants pay us back. It's a huge savings for the landlord/owner and it encourages conservation.

You have to present this to a tenant at the beginning of their lease. You cannot add it to a lease mid-way through (the city will consider a rent increase). Make sure you include it in the lease. You will be thankful you did. 

THE 2.5 x 1 RULE

When you are reviewing tenant applications you should adhere to rules you are consistent with. In order to keep people paying their rent, we want to make sure they can afford it. We require that any applicant has income 2.5x greater than the rent.  It's pretty standard, but it also weeds out people who might not be able to afford the apartment. We publish it in our listing ads so that the requirements are clear.

THE LEASE

Make sure you include everything in the lease. Our lease is over 10 pages long. it talks about everything from playing music too late and too loud  to bedbugs. It includes a description of RUBS, it includes parking instructions, what day to take out the trash, how to pay rent, it covers legal information such as us entering the apartment and in what capacity. It covers subletting and that it is NOT allowed. With the rise of AIRBNB and our apartments being in popular neighborhoods for this, we make it clear that AIRBNB is not allowed. Say it upfront, even if the lease seems annoying. You cover yourself legally and you know that everyone is on board.

ADDENDUMS

We include plenty of addendum to our lease. There is a separate 4-page bedbug addendum with photos, tips and instructions should they suspect bedbugs. It also lays out liability for payment of bedbug services should there be an issue. It also requires them to sign that upon move in, there were not bedbugs, should there be any confusion about this. Sometimes you create additional paperwork as a result of having been in the situation. We found on one account that our 10-page lease, which says a lot, didn't specify who would pay for bed bug treatment... And so, we ended up paying for it.  That has now been amended.

USE YOUR GUT.

My number one tip is use your gut. Like in life, you have to feel things out. You have to sleep at night. There are laws about tenants. Maybe an applicant checks the boxes and says the right things, but there is something you can't put your finger on that makes you think something is off in your gut. LISTEN to it. You can always say no. I would say once you start hearing excuses and stories about a reason something can't be provided, start listening to those excuses with your gut. The sketchy applicants usually can't perform if you hold them to all the standards and rules you have created for yourself. 

Here is a list of what we require.

-2.5X Rent Income requirements

-Income verification (THIS one is big. It's easy to say you make 6k a month on an application, but then what?) I ask for income direct deposit or deposit receipts if I feel like I need to. I check employers for employment verification and I ask the employer to verify income. I have had issues on more than one occasion that incomes can't actually be verified and in that event, we don't rent to them. Simple.

-Bank Statements. I request bank statements that show balances over 3 months with deposits and withdraws. If there is no savings or they hover at close to zero, that is a big red flag for us.

-Credit Check and Background Check for each person. This shows me 1. who is serious about renting. If they are spending $40.00 each for this report, they are likely interested. 2. it tells me how often they are late with their bill payments. A low credit score isn't a deal breaker for us. Be realistic, how many of us screwed around in college and got into trouble. A high score is very helpful in showing you are responsible, but a low score can be explained and made up for with items above.

-Deposits. We require deposit and first month's rent checks to be cashier checks or we request digital payment. (Make life easier). Sometimes a check takes a week to clear.

THE BIG ONE

-We require people to see the apartment themselves. We rarely rent to someone moving from another city unless we can Skype with them and a family member or friend can come see the place. We are bound by a lease and laws that they are there for a long time, so we want them and us to be happy. Meeting people, getting a feel for them, and them getting a feel for the space is key.

Just a few tips to make the concept of being a landlord less daunting.