Dealing with the No-Show Part I

One of the most amazing aspects of human/tenant behavior that I had to learn the hard way is that roughly 50% (and sometimes more) of people who go to the trouble of calling you about a rental and set up a time to view it will choose to simply never show up. This was foreign to me - I don't miss 50% of my appointments for no reason, and I didn't think it would be that way for people making appointments with me. I'm also used to calling to let someone know if I'm going to be late or unable to make an appointment. These folks will not bother to call you in most all cases. The fact that you are taking your time and driving to the rental seems to be unimportant to them.

I've tried to determine what causes this behavior, sometimes contacting no-shows and asking them what happened; do these folks all have real emergencies that come up? No. The answer seems to fall into one of four basic areas: 1) They were just "window-shopping" or fantasizing about getting a new place to live. Maybe they are living with family things are going poorly, or they had a disagreement with their current landlord and were just being wishful about moving. The reality of seeing a place and getting the sales pitch would actually burst their bubble when forced to admit to themselves they aren't going to do it, so they keep it at the wishing stage, but setting the appointment makes the fantasy a little more real. 2) They were looking at other places, found something and just didn't think it important to let you know not to waste your time 3) Their life is such that they aren't able to keep hardly any of their commitments. For these folks, realizing that Oprah is on at the same time as your appointment is enough to distract them. 4) They just changed their mind - maybe they checked the school districts or utilities and didn't like something, or realized that some money they were going to use for the move isn't really coming, etc. Once they've realized that they are no longer interested, remembering to let you know just doesn't seem to occur to them. There are some folks who will miss an appointment, but call you right afterwards, or even at the appointment time, to let you know that they've had something come up and couldn't make it. Even though you have been frustrated, those who call are worth a second chance - the fact they called you at all makes them a cut above many, and potentially a good tenant.

The worst/strangest one I had was a lady who no-showed after she had showed. I met her, showed her the apartment, she asked all the questions she could think of and she liked it so filled out the application. We require $100 with the application (all but background check cost refunded if they aren't accepted, applied to deposit if they are accepted). She said that she would need to run to the bank to get the money. So I waited. And waited. And waited. Finally, after about 45 minutes, I called her. It was obvious that either she didn't have $100, had car trouble, or had changed her mind. She had forgotten for some reason that I had her phone number, so when she answered and I asked if she was OK she became so flustered all she could do was stammer. Finally she lied "I'm on my way back now" and hung up. It was more than obvious that she was lying and changed her mind. I waited 20 more minutes to satisfy myself that she was lying, and when I called her again she wouldn't answer the phone. So here was someone who was willing to just leave me standing there not once, but twice, rather than admit that they weren't really going to rent anything. But it helped me understand the mental state of these folks somewhat - she was either too embarrassed to tell me that her renting the unit was just a fantasy, or too embarrassed to admit it even when I called her back on it, but she was obviously embarrassed and lying to cover. Stating the reality that she wasn't really going to rent would apparently ruin the fantasy; whether she was embarrassed because she was caught having the fantasy or caught bailing out (or both) I couldn't tell. For most, just setting the appointment is as far as they take the fantasy - she had just taken it a couple of steps further.

Next: Things you can do to cut down on the "no show" problem

Painting Your Rentals Part III

OK, you've determined that you're going with a quality latex white paint, same brand same shade every time, and a flat and/or satin texture. Now it's time for preparations. Prep can be very time consuming and time is money, so how can we cut down on that?

First, come prepared. You'll need: sandpaper (medium to fine), duster with an extension, a cleaning rag and a degreasing cleaning agent (something that will break down oils, like Formula 409) medium sized screwdrivers (a flat head and a phillips, just to be sure), Kilz spray primer, and drywall mud (also called drywall compound or joint compound), and a small to medium mud knife for putting on the drywall mud. Those things are pretty common sense, but you should also have a stock of standard outlet covers, switch covers, door stops and light bulbs. You might as well bring these with you every time.

First, go through the rental unit and determine if you are going to be able to get away with touch-up painting, or are you going to have to paint entire walls. While you're at it, replace burnt out light bulbs (it's fascinating how often tenants will simply refuse to replace light bulbs), and set out new outlet covers and switch plates next to where any are missing, damaged or dingy. We simply use white plates and buy them in bulk. A dingy cover plate is an eyesore that is cheap and easy to take care of. Damaged or missing plates can also be a safety hazard (which agencies like Section 8 Housing will require you to replace anyway). Replace any missing or damaged door stops (unless you just like patching drywall where the doorknob gets pushed through the wall). We also buy these in bulk. Most units that I see have doorstops put in them that are in essence a spring with a rubber tip on the end. Avoid these; they go bad easily (and look bad when they do) and the spring is already compressed so they don't really provide any cushioning for the door. We use cheap solid doorstops with the tips, that again we buy in bulk.

Next go through and use your duster to knock down the inevitable cob webs that will be along the ceilings. As you do, examine the dirty spots and smudges on the wall. Are they just dirt, or something sinister like permanent marker, or oil or wax based stuff (crayons, vasoline, greasy food thrown on the wall, etc.).

Time saver: it's my experience that "regular" dirt, like a shoe print, or dirt smudges from furniture rubbing against the wall, don't really need to be cleaned or heavily sanded. You can just paint over it.

For items that look oil or waxed based, it's going to require some work, since paint won't adhere to those well. First try cleaning with a degreaser, then sanding. You don't have to get it all off, you just have to create a surface that paint can adhere to. After sanding some, take your finger across and see if the texture of that area feels comparable to the texture of the other areas of the wall. If so, then go ahead and spray the area with primer (otherwise keep at the sanding a little more first). In most cases that will suffice.

Then go through and use the drywall mud to patch small holes like nail holes. This will work for small to medium holes and dents, but there reaches a point on larger holes (say more than an inch across) where the mud has nothing to rest on and you will have to provide a fill of some kind (but that's another lesson).

While the drywall mud is drying, you can remove the outlet and switch cover plates from walls that have to be painted. To do it right, phone outlets and cable TV outlets should be unscrewed as well (they will still have wires attached and can just hang loose).

Some folks find that painters tape (the blue stuff made by 3m) is helpful in preping areas where you want to protect from over painting, like on the carpet when painting the floor molding. I've found that with experience you don't have to do as much taping as you might think, but if you've got those areas, now is the time to put down the tape.

After the drywall mud dries (they even make some that goes on pink and then dries white so you'll know when it's ready), it needs to be sanded. For nail holes, a few hard strokes with a medium sanding surface (we like the ones that are foam blocks with sandpaper on the exterior) should do it. For larger holes you need to sand it until it's as smooth as the surrounding wall. For good measure, you might want to make a few broad strokes with a sanding surface over the entire wall, especially if there has been heavy smoking or cooking (grease and tar film needs a little sanding to create a good surface).

Next, save time on cutting in and trim work.

Tenant Application and Background Check Part I

Application and background check is one the most important things in real estate and yet it tends to be one the most overlooked (amazingly, many landlords, even apartment complexes, don’t even really do background checks, but I confess to doing it poorly at the start too). In today's age of technology/Google our tools for weeding out bad tenants are better than could have been imagined not too many years ago, though. It can save you a lot of heartache if you can avoid sure-fire deadbeats, and they are out there looking to rent from you.

Something you should understand is that in any town, even a small town, there is a group of tenants who simply move from property to property constantly (owing all kinds of back rent) and they often are among the first to respond to your ad. They are constantly watching the ads in the paper looking for “fresh meat” since they have been written off at a number of places already, so they’re looking for you if you're the new landlord on the block. You protect yourself from these leap frog and other types of bad tenants primarily with your background check.

A mistake a lot of landlords make is requiring only one application, even though more than one person is going to live in a rental unit. The scam we’ve seen repeatedly is that there are a lot of guys out there who will find themselves a girlfriend who has a clean record and have her apply for the rental. If you were to check on the guy, he often has a rap sheet that's pretty significant. So we learned to insist that every adult who wants to live in the apartment must fill out a separate lease application of their own and the lease itself will contain language that prohibits people from moving in without your approval after you’ve rented it. If you don't do this you will get taken advantage of. Over and over we’ve had situations where a boyfriend or girlfriend moved in “under the radar”, and had it turn out to be a big problem. If we suspect someone is living in the unit who shouldn’t, we start snooping. Ask the neighbors what’s going on, see what cars are staying overnight, etc. When you find this going on, insist on an application from the new resident (unless you already have decided you don’t want them), and run it just like any other. You have to build penalties into the lease for keeping unauthorized roomies. If they don’t pass your application, you boot them.

Before confirming employment and the other details of the lease there are few things you do online. If you hit a big negative in these simple things, you don’t have to waste time on the rest. The first thing that you do after getting an application is to Google them. Google is an amazing tool that is a quick and easy place to start, though it can’t nearly do everything. Search on the applicant’s name (and variations like nicknames) and the address that they last lived in to see what turns up; search through the news feature of Google as well as the web search. In most cases now, local city newspapers are searchable. In many places arrest records and sometimes even court convictions are recorded online in the paper. You have to do this search separate from Google (these databases typically exist outside of what Google can access), but it too can turn up a wealth of information. The next thing you do is make sure that they are not a registered sex offender. If you have a small apartment building you can see the situation there deteriorate quickly if you start letting sex offenders live there. Sex offender is an automatic “no” for us on applications. Every state has a website where you can search for sex offenders. If you Google the state name along with “sex offender registry” it should turn up.

Next we get into the nitty-gritty of finding those “leap-frog” tenants before you let them land on you.

Save Money and Time Painting Your Rental Properties II

A few more fundamentals about painting:

Primer: if you are having to change the color (say that first time you’re putting your nice standard white down and the old color was brown or blue) you’ll want to put a coat of primer down first. If it is something dark (forest green, black, navy blue) you’ll never get anywhere without primer. Try painting a dark green wall with a light color but no primer, and you’ll be putting down six or seven coats and still see the green bleed through (learn from my mistakes). Once you get your white established, you shouldn’t need to prime again. Primer is thinner than paint, dries quickly, and creates a surface that the paint likes to adhere evenly to (better coverage). Don’t worry if the primer coat doesn’t look like a layer of even paint or that the color underneath is showing through, as long as you covered the entire surface.

Texture: There are different textures of paint, from flat to glossy, that include variations like satin, eggshell and semi-gloss. You want to keep life simple, and gloss and semi-gloss are usually not good choices for rental units. Eggshell is a compromise, but not available in all paints. The advantage of semi-gloss is that it is easier to clean. The advantage of flat is that it hides imperfections in the surface better. While cleaning semi-gloss might sound like a good idea (if doing a little cleaning might save you from having to paint, right?), it usually doesn’t work out that way. Tenants are hard on paint, and usually scuffing, dirt, shoe prints (we once found a perfect shoe print at the top of a wall), etc. are beyond recovery from mere cleaning, and you still have to repaint with semi-gloss. Most landlords end up realizing that flat is the best, at least for the walls. We do compromise by using satin on trim and doors (satin is a little more flat than semi-gloss). The inevitable hand prints on doors and door trim might be cleanable. Also flat is to some people irritating to the touch, so on those surfaces like doors and trim that will get regularly touched, it comes across a little better to some. If you really want to keep it simple, though, just make everything either flat or satin. One final reason for avoiding semi-gloss/gloss, is that the flat provides a better surface for your inevitable next layer of paint to adhere to (unless you just enjoy sanding).

So, what brand of primer and paint do I use? Kilz is widely recognized as a superior primer, and we were impressed. We were so impressed, that when Kilz began making paints, we tried them. And were impressed again. It did as well getting the job done in one coat as anything else we’d used, and the container is well-designed. The cap can be used to hold small amounts of paint (perfect for keeping you moving faster when cutting in with brushes), and it has a catch that brings excess paint from when you pour (or paint you had in the cap when you put it back on) back into the container, instead of running down the side like we’re so used to with traditional paint cans. It even has nice touches like a handle that won’t cut into your skin like the thin wire does on traditional cans. Kilz primer is available at all sorts of hardware and paint and department outlets. Kilz paint, though, is only available at Wal-Mart. Also, Kilz tends to stock all their textures equally, even though I’ve discovered that I’m not the only landlord partial to their flat white interior. Sometimes it sells out, so we tend to stock up when it’s available (and sometimes you can find it in 5-gallon containers).

Next: preparation and execution, and where you can cut some corners.

Save Time and Money Painting Your Rental Properties

A Landlord has a lot of expensive maintenance items to deal with; water heaters, heat pumps, roofs, carpet, etc. However, I’ve found that there is one maintenance item that is the most expensive by far: painting. It’s easy to miss that, since cheap paint may run $10-$12 a gallon, and replacing the compressor on a heat pump can easily run $750 or more. There are two reasons that painting is the number #1 maintenance budget killer 1) It is time intensive. It takes about two hours of labor to replace a water heater. My experience is that it takes a competent painting crew about 50 labor hours to do one of our 1000 square foot duplex units. While you’re obviously going to pay the plumber a higher rate on the water heater, that 50 hours really adds up. 2) You’re going to do it over and over. And over. One of the most frustrating experiences in real estate is to work hard painting a rental unit, and then find yourself right back there a few months later after some deadbeat tenant has skipped out (and you find out that they had a penchant for nailing lots of large nails and their kids like to crayon the walls). One deadbeat that only stayed in one of our units for a couple of months before we evicted him had put in over a hundred nails in the wall. Because painting will likely be your biggest recurring expense, it pays off to find ways to be efficient about it. This several part series on painting will show you how to save those precious maintenance dollars.

The first thing is to pick one basic color and stick with it. Don’t try to be a decorator with your rental units. The color you will pick is white. Not antique white, not bright white, not sandstone white. Just white. Tenants will complain that white is boring (though I disagree), but when you are showing the units nice white paint says “clean” in their subconscious, and a bright room looks bigger and is psychologically more positive. As an aside, you will have tenants who ask you if they can paint. They’ll tell you what great decorators they are, how they’ll repaint when they move, how much it means to them. It will all sound very nice. Your answer, always, is “no”. That can’t be emphasized enough. It is always “no”. Even if the tenant asks you if they can touch up using your paint, the answer is no, but you can have it done for them (for cost). After a couple of times repainting a room a tenant has painted black or orange (I’ve been there), or where the tenant painted over the outlet and switch covers, door knobs, and pretty much everything (been there too), you’ll share my pain. Sometime I’ll entertain you with a collection of painting horror stories. Bottom line is that a tenant can do more damage – in terms of the time and money it costs you to fix it – with a can of paint and some good intentions than vandals with bad intentions.

A few fundamentals about painting: there are two kinds of paint, oil based and latex (water) based. Life for you will be simple – never use oil based paint to paint the interior of a rental unit. There are also two kinds of paint: interior and exterior. We’re talking about interior painting, although in some brands using an exterior paint on the interior is OK. There are also two kinds of paint: cheap stuff and quality stuff. I’ve tried the cheap stuff. It ends up costing too much money, because it’s more likely to require a second (or third) coat. Saving $5 a gallon doesn’t look like such a bargain when it doubles your labor time with a second coat.

You want to use the same brand, same color (white) every time. What you’re hoping for is to merely have to touch up the paint job next time you come back, rather than redo every square inch. This is important also because turn-around time on getting the unit ready can be critical. It’s hard to rent something that isn’t finished with the cleaning and painting.

Next time: Primers, paint textures, and what brand I use.