tenants in a non owner-occupied duplex

I’ve now moved out of my previously owner-occupied duplex, and the duplex has been a “regular” (i.e. non owner-occupied duplex) now for a little over a year. For a while, the upstairs tenants stayed on; they had started living there while the owner (myself) was still downstairs, so it still had that sort of “owner-occupied” feeling, but now I have a whole new batch of tenants up and down, who are used to the owner being off-site the entire time. I was a bit concerned that things would be different with the owner not around, but thus far haven’t run into any issues…

Cosigners, a signed lease, and a successful turnover

Well, this last turnover turned out pretty well — possibly the best so far. I sent out one cosigner application (I really only needed one additional guarantor), and received a complete application from not one, but two parents of the couple moving in. (Maybe each father wanted to be on equal financial footing if things were to go awry?). I pulled credit reports on both guarantors, and they both checked out just fine. I scheduled a lease signing, got a check for the security deposit, and received signed and notarized cosigner agreements within a week. The couple really seemed genuinely excited about the duplex, and it seemed cute that it was their first place that they would have together.

Decisons, Decisions…

So, I got my first applicants after only a few showings. I love love love getting applications. It’s like a big scavenger hunt, calling references, checking credit, figuring out who these people are and what they’re like… That, and I’m one step closer to getting a lease signed, which means I can take the ad down and stop scheduling showings.

Oh, the fraudulent tenant from overseas scam…

Annie spencer will be moving to my very specific (yet undisclosed) city/state! She saw my nonexistent for-rent ad! Sounds like it must be for one of those scam deals where they send you a big deposit on the apartment, then ask you to wire a portion of it back (because some emergency takes place), and then only after you’ve done that do you discover that their original check was fraudulent…

Changes in FCRA, TransUnion policies create screening problems for small landlords (like me)

I just received an email today from Landlord2Landlord, my screening agency, saying that TransUnion had changed its requirements, which creates big problems for me. Previously, of the three main credit reporting agencies (TransUnion, Experian, and Equifax), only one allowed small landlords to pull credit reports on potential tenants without having an “on-site inspection” of their property management office — to ensure that credit reports were dealt with in a professional and confidential manner, kept locked up securely, etc. In the case of a small landlord whose “office” was in his or her residence, Experian and Equifax required an inspection to ensure that the “property management office” was separate from the living area of the residence, and that it was “secure”. This all sounds fine and good, but I have exactly ONE rental unit. They want me to have a totally separate, locked room to store credit reports for my ONE rental unit, or else I just can’t pull them at all?

Selecting Tenants and Avoiding Fair Housing Discrimination Complaints

Selecting tenants is really one of my most important decisions as a duplex owner. If I screen poorly and select the wrong tenants, I could find myself with property damage, police calls, noise complaints, and even worse – an eviction case. If I select the right tenants, everything should go smoothly and I’ll hardly know they’re there. So I have to be choosy, but there are a lot of restrictions on the ways in which I can do so — I have to be sure not to inadvertently violate federal Fair Housing Laws.

Fair housing laws and renting (or not renting) to families with children

When selecting tenants, I have a limit of three people for my rental unit. Local zoning laws state that I cannot legally rent my unit to “more than three unrelated persons,” which means that a family of 5 or 6 (or more) could legally live in that space. However, even though it is a three bedroom apartment, it isn’t very large. Also, there is only one water heater for the duplex, AND I live below the rental unit, so I like to keep the number of people as low as possible. As far as I can tell, it IS legal to tell someone you can’t rent to them because they have too many people. However, you CAN’T tell someone that you won’t rent to them because they have kids — that violates fair housing laws.

Checking References

The first time I screened prospective tenants, I wasn’t quite sure what to ask their references. I did some research on what others ask, and added some ideas of my own. I also found in Every Landlord’s Legal Guide that there are legal restrictions on what type of information you’re allowed to ask.

Some people I talk to are very talkative, and immediately volunteer shining reviews; in that case I don’t feel its necessary to go through the whole list of questions. Some people will ask me to fax a signed release (their application). And then, there was the guy who couldn’t get it through his head that I was a LANDLORD asking for a reference, not a TENANT… Usually getting references aren’t a problem, though 😉

Tenant Screening (Don’t get too excited just yet.)

Screening. It’s important. I’m about to allow relative strangers to move in above me, and be in possession of over $100,000 worth of my real estate investment, with only about a thousand dollars to cover any damages. That, and I’m counting on them to pay me on time, every month, so that I can make my mortgage payment. It’s kind of a scary thing. While I do feel like I usually have a good sense of “gut-feeling” about people, this is the kind of situation where I want to back that up with some objective information.