I'm about to become a landlord and need help deciding what to do with the current renters.
June 24, 2011 7:38 PM   Subscribe

I'm about to become a landlord and need help deciding what to do with the current renters.

My father died in February and I have inherited his two story house (with no mortgage). I have decided to keep the house for now because the market is not great (although my gut wants to sell it). Currently there is a single father and his teenage daughter living on the first floor. My father was a very hands-off landlord and the rent included oil heat and there was never any lease.

This renter has offered to move to the second floor (which offers more space) and has offered to pay a higher rent (although heat still included). The main problem is I don't believe this renter is a good tenant. I inspected the property last week and there was dripping water in the bathroom that he never mentioned, cluttered boxes in the back hallway that he had been asked to remove months ago and in general the apartment was a wreck. The thought of him moving to the second floor makes me uneasy.

There are some added complications in that 1.) I live about 90 minutes away and 2.) I'm not sure what the rental market is in this town. I feel like I could get the same amount (if not more) then he is offering but this would mean a prolonged period of vacancy and I don't have a huge financial cushion. This might result in a more responsible tenant though.

My father's partner will be moving to the first floor and she will be serving as a de-facto building manager (collecting rent, keeping on eye on the property, arranging repairs), but I feel like I'll never have as many options as I do now (raising rent, evicting, etc.)

Basically I'm looking for advice from people who may have been in this new landlord situation and can offer some insight on what to do. (This property is in Vermont in case that helps).
posted by anonymous to Home & Garden (13 answers total) 2 users marked this as a favorite
Have you thought about going with a professional property manager instead? Some of my relatives who inherited a house they're now renting out did, and they're pretty satisfied.

Hiring someone experienced in this field might help you figure out what a reasonable rent is. Since it seems the first floor is in poor condition (?) or needs repairs, such a property manager would be able to make arrangements for renovations there, and possibly for renovating the second floor as well, which might help you get a higher rent. The property manager would also interview prospective tenants.
posted by shoyu at 8:00 PM on June 24, 2011

I think you might be a bit too critical, particularly if this fellow has been on time with the rent for an extended period. "Very hands-off" landlording...tenant didn't complain about a problem? There're unspoken agreements in a lot of landlord-tenant relationships and you may be looking at the fallout of "hands off" rather than an irresponsible tenant on that one. "Cluttered boxes in the back hallway" is not really, I don't know, moulding food attracting rodents or anything serious. (Why was he asked to move the boxes? Are they in his apartment, or...?) "A wreck," damaging the property, or "a wreck," you yourself would never make clutter with boxes?

It sounds like you are maybe ill-suited to landlording (and perhaps cognizant of this), and with a built-in property manager + long-term tenant I don't think you need to worry as much as you may be worrying here. If the rent has been steady, looking for a "more responsible" tenant sounds like a very bad gamble, especially in a slow real estate market. Also, are you sure you're actually in a position to legally evict?

This book ("Landlording") comes highly recommended. I would get a lease written up and discuss your desires to be more proactive with maintenance issues, but otherwise stay the course. Evicting based on clutter (sane levels of clutter -- and I am assuming some level of landlording competence on your Dad's part) is not a nice thing to do.
posted by kmennie at 8:03 PM on June 24, 2011 [16 favorites]

get a property manager. it is worth every penny. most of them charge 10% of the rent.

the property manager does more than just answer the phone at 2am - he also is responsible to make sure that all the correct paper-work is completed by each renter. He collects rent.
posted by Flood at 8:14 PM on June 24, 2011

I have never been a landlord, but I've listened to my family complain about their landlording experiences my entire life long (and am presently a tenant in a building owned by a hands-off bordering on slumlordship property management company). So I'm very aware of landlord-tenant issues despite my lack of direct experience of them from the landlord side.

It's hard to really tell from your description, but it really doesn't sound like your current tenants are that bad. Your two complaints sound trivial, possibly even non-issues depending on their actual nature.

Indoor clutter isn't really a landlord's business, barring exceptional circumstances (health/infestation risks and hoarding-level mess being exceptions). Assuming the nature of the "cluttered boxes in the back hallway" and the apartment being "a wreck" aren't health risks and aren't at hoarder levels, then it's really not the landlord's business. If I had a landlord who policed me for things like that, I'd move out in a jiffy - a landlord is not a mom! If it's dusty or dirty or whatever, cleaning that up when they're gone is what the security deposit is for. (Perhaps a first step might be to have an actual lease drawn up, and collect a security deposit when it's signed...)

Not reporting dripping water in the bathroom is slightly more worrisome, depending on the nature of the drip. Was it in the sink or bathtub? If so - not really a big deal. It's not going to make the house fall down, though it might make the water bill go up. If it's leaking in a way that it might have been damaging the integrity of the house, that's another issue - but as kmennie points out, if your father was a "hands off" landlord it might also be an instance of understandable neglect.

But really, even based on your uncharitable description of them your current tenants actually sound pretty good in that they are willing to work with you, they seem to acknowledge that there's a transition happening in how the property is being managed, and they never ripped your father off (or set the building on fire, or whatever) during the years they've lived there without a lease (!!!)

It sounds like you are maybe ill-suited to landlording (and perhaps cognizant of this), and with a built-in property manager + long-term tenant I don't think you need to worry as much as you may be worrying here. If the rent has been steady, looking for a "more responsible" tenant sounds like a very bad gamble, especially in a slow real estate market. Also, are you sure you're actually in a position to legally evict?

Everything in this paragraph is right on.
posted by bubukaba at 8:41 PM on June 24, 2011 [3 favorites]

As a former landlord, informed renter and someone who had a real estate license way back when...

I STRONGLY urge you to consult a landlord attorney. Better yet, see if there is a landlord association jurisdiction in your area and join it! They offer lots of free services (usually) and can answer many questions.

- Where is this tenant's deposit? How much is it? Will it cover potential damages to the house? Do you need to calculate yearly interest on the deposit and remit this to the tenant? YOU WANT TO KNOW THE ANSWERS TO THESE QUESTIONS.

- Consult the attorney about the legality of drawing up a proper lease for a tenant already in residence for your jurisdiction. You will want to include riders about tidiness and MANDATORY notifications about water leaks. Water will destroy your home, and tenants are so so famous for not reporting small plumbing problems or structural leaks until they become costly issues. Cover your ass here.

- How old are the daughters? Do they have rights to the tenancy after the dad moves out or whatever? You want to know this for the future, just in case.

- Yearly or bi-yearly inspections. You want them.

- What are grounds for eviction in your area and how costly is it? Can you even terminate this tenant's tenancy at this time? You want to know.


- What makes your dad's partner a qualified property manager? Will she have a lease? The same concerns about termination of tenancy apply to her as well, should the relationship go south in the future and/or you want to sell the home.


Going by your ask, I will counsel you to think long and hard about this situation. Frankly, I think you should sell.

My problem is that even if the current tenant moves upstairs, it will likely cost a lot to rehab his old space for the next tenant, your father's partner. Your dad's old space may need lots of work, too, in order to be move-in ready for the guy and his kids.


It can get costly in the meantime. You need to have liquidity to fix all repairs minor (small plumbing leak) to major (new roof to fix leaks, new boiler or furnace.)

**Get a Home Inspection and get an idea of the cost for upcoming or current necessary repairs** This is a major factor in your decision.

In short. You don't sound prepared for this endeavor, but you could get up to speed if you are keen. Otherwise, dump the property and be happy for the profit.

Memail if you have further questions. I'm sure I left out concerns, this is just off the top of my head...
posted by jbenben at 8:42 PM on June 24, 2011 [4 favorites]

Also, I STRONGLY disagree (although respectfully!) with bubukaba's ascertion that clutter and messiness is not your problem.

Long term tenants who don't keep a nice house are usually hiding years of repairs. The problem here is their place is a mess, they don't want anyone to see it, so they hold off on notifying the landlord when small stuff needs doing. What would have been easy and cheap to fix in the beginning becomes very expensive years down the road.

Not staying current on maintenance is the BIGGEST mistake most landlord's make. They defer tasks thinking they'll get to it later. Later adds up to big $$. Like with car maintenance, it is always cheaper to fix problems in the beginning.

So, there's that for you to consider as well. It doesn't sound like your dad was very proactive in this department. Don't be surprised at what a thorough inspection might turn up. If you have a trusted friend that is a contractor, get them into the house asap to give you a rough estimate of what it will cost to maintain the space right now.

Good luck to you!

I think you can do this if you really really really want to. You just need a good primer in the biz.

Please don't let anyone else's concerns overshadow yours. If after fully sussing out your situation you feel it isn't financially worth it, don't be afraid to make the hard decisions.

The good news is there are plenty of residential properties for rent and no one will be homeless if you decide to sell. Do what is best for you.
posted by jbenben at 8:54 PM on June 24, 2011

As a landlord, I also disagree with the suggestion that clutter and messiness is not any of your business. Best case scenario, a slob for a tenant greatly increases your costs preparing the place between tenants (or to sell after a tenant); worst case, the untidyness is hiding or exacerbating an existing repair--what jbenben points out: a tenant who doesn't want you to see a mess or doesn't want to clean a mess won't report small repairs until they are huge expensive repairs. It's happened to me more than once.

Tenants come and they go--even really good tenants who always pay their rent on time and never disturb the neighbors. It may feel awkward not to renew a lease, but as long as you are within in the law--as well as decent and respectful toward your tenants--sometimes not renewing a lease is in the best interests of the property. For instance, if you have a major renovation planned or if you're changing management , it may make the most sense not to renew a lease. Even though we all need to be decent human beings, as a landlord, your first concern is actually the best interests of the property, not the desires of your tenants.

At a minimum, don't do "informal landlording" with no lease and unwritten agreements about how the property gets used, or repairs get made, or permission about where the tenants can store belongings or trash. It's incredibly hard to remain within the law, and be decent and respectful toward your tenants, if everything is done informally. That's just asking for misunderstandings and looking to create problems that don't have simple solutions.
posted by crush-onastick at 9:40 PM on June 24, 2011 [2 favorites]

Just as anecdata, I've lived in my rented house for 11 years. If the faucet was dripping, there's no way I would bother contacting the long-distance landloRd about it. Experience has taught me that it would be a frustrating, wasted effort.

Be a hands-on owner, or let your father's partner be one. Give the tenant a chance. A property mgmt company took over my place almost two years ago, and now I actually feel comfortable asking for repairs.

It's a two-way street -- it's hard to be a tenant when the landlord doesn't want to be a landlord.
posted by mudpuppie at 9:43 PM on June 24, 2011 [5 favorites]

You don't say where you are, but here in the midwest vacancies are frictional - landlords have just enough time to paint a place before the next tenant moves in. They often have several qualified applicants and then choose the one that can sign the longest lease. Banks are a lot more conservative, fewer people can get approved for home loans, the rental market is very strong.

First, talk to a property manager and pick their brain. Find out the vacancy rate in your area. Look around - are there a lot of "for rent" signs? The old law of supply and demand - if there are fewer options within a mile of your place, chances are you could rent it quickly.

In your situation I would lean towards hiring a property manager, especially if the place doesn't have a mortgage.

If you do decide to do this yourself, charge an application fee that covers the cost of a credit and background check. Call past landlords. Be very diligent.
posted by Ostara at 10:28 PM on June 24, 2011

Sorry, I see that you are in Vermont. My bad!
posted by Ostara at 10:28 PM on June 24, 2011

People are saying just get a property manager, like that is going to solve all your problems. If you decide to go that route, make sure to get one that has very good references and keep an eye on them. You have to manage your property manager. I have worked in property management for three years. There are some shockingly bad ones, and sometimes they are ones with a lot of business.

If your property manager is selecting tenants for you, don't just take their word for it that they are screening people. Be involved in the process, ask to see applications and credit and background check paperwork. I know of a couple of property managers who claim on their websites that they have a stringent background check but don't even call the former landlord.

As for the other issues of the boxes and unreported leak, we don't have enough info. Having a bunch of boxes may just be an aesthetic issue or it can be blocking the common hallway creating a fire hazard. A bathroom leak is wasting water that the landlord pays for, and possibly causing structural damage if it is dripping somewhere besides the drain. What does it mean that the apartment is a wreck? Major clutter? Holes in the drywall and broken windows? It's hard to say from your description how serious these problems are.

If the conditions of the lower unit don't warrant return of the security deposit is your tenant going to be willing to pay one for the upstairs? Basically, you need to consult a lawyer about all this stuff.

In many areas of the country, the rental market is very tight - there is a very low vacancy rate because people who would ordinarily be able to buy homes are not able to get loans and they are now renting. That is really a bad thing in general, though it means you may be able to get very desirable tenants in your building at this time.

Anyway, you have to either educate yourself a lot about property management and have your father's partner manage it, educate yourself a little about property management and get a management company, or sell it.

Good luck and feel free to memail me if you have any questions.
posted by Melsky at 3:09 AM on June 25, 2011 [1 favorite]

At a very minimum, you need a lease. Whatever informal arrangement the tenant had with your Dad is moot now, not having a lease is inviting trouble. You also need a lease for your father's partner if she is living in the property. She is as much a tenant as anyone else. You're going to need to talk with an attorney, as mentioned above.
posted by T.D. Strange at 4:39 AM on June 25, 2011

The main problem is I don't believe this renter is a good tenant. I inspected the property last week and there was dripping water in the bathroom that he never mentioned, cluttered boxes in the back hallway that he had been asked to remove months ago and in general the apartment was a wreck.

I don't know that this is enough to go on to prove that this guy is a bad tenant. We live in an apartment where there used to be a property management company, but now the owner has fired them and is "taking care of things himself". For the last two winters I've told him about the clogged roof gutters, and other tenants have told him about various other issues. He doesn't seem to care. The place is falling apart. The property management company would have been right on these things. My point is that maybe your tenant used to tell your dad these things, and gave up when your dad didn't respond. That doesn't make them a bad renter. The boxes-maybe- is it a shared hallway? Who asked him to remove them, you, your dad, or his partner? Did you ask the tenant why they were still there?

To have a long term tenant that pays rent on time is a sgood thing. You can manage the property better, with inspections and clear expectation written in the lease (shared areas must be free of clutter, &c.) I think going with the tenant you know is better than hunting for a new one. I'm not sure having your dad's partner manage the place is a good idea, unless she's professional or otherwise has some reason to recommend her.
posted by oneirodynia at 10:02 AM on June 25, 2011

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