Buy It, Rent It, Profit! by Bryan M. Chavis

Author:Bryan M. Chavis
Language: eng
Format: epub
Publisher: Touchstone
Published: 2009-08-18T16:00:00+00:00

* * *

SECURITY DEPOSIT PLEDGE

You should have two separate bank accounts: one for depositing your security deposits and one for your rent. A security deposit is not your money. You may not spend it. The IRS likes to see that the funds are not commingled. This is a must for security deposits. I recommend you use a bank that returns canceled checks to help you with maintaining your documentation.

* * *

Rent

You need to be as specific as possible about when and where the rent is to be paid. That can either be in a locked communal rent box, mailed, or dropped off in person at a management office, your residence, or wherever else you specify. You can even specify that you require a one-party check or money order. Cash is a legal and acceptable form of payment. Not accepting a cash payment could negate the resident’s rent responsibility for that month. I don’t recommend that you do cash transactions routinely—you should do everything you can to discourage tenants from paying with cash. Clearly, you need to be careful when handling cash payments—knowing how to identify counterfeit bills is important—and you should deposit the cash as soon as possible. Carrying large amounts of cash is a real safety issue and if there is a dispute between you and your tenant on payment of rent, cash is hard to track and prove receipt of.

Late Fees

As a part of the rent portion of the lease, you should also be sure to include a late fee. Generally, I have imposed a onetime per month late fee of $50 any time a tenant has not paid the rent by the fifth day of the month. Having your tenants initial this part of the lease when you review it with them prior to signing is a good policy. I know of several landlords who have a $50 late fee and add on $2 a day for every day after the rent deadline has come and gone without payment. This method is good for encouraging tenants to make rental payments in a timely manner. Just be careful with daily charges. Many judges have deemed this excessive.

Utilities

Along with specifying whether you or the tenant is responsible for each utility (water, gas and electric, phone, cable) you should also include a statement to this effect: “We are not liable for any interruptions or malfunctions of service. You may not occupy your apartment without electric service except during brief interruptions beyond your control.” Hard to believe, but landlords have had tenants who either never had their utilities turned on or who had them shut off for nonpayment and continued to try to live that way. Requiring electric is one way to protect the condition of the property.

Whether you pay for utilities or the tenant does is a matter of knowing your market. You will figure in the cost of utilities when you set your rent, so go with whatever seems to be customary in your market area.

Parking

Your lease should clearly state where a tenant can park.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.