Painting Your Rentals Part IV

Normally painting goes like this 1) Prep (and repair if needed) 2) Cutting in and trimming 3) Rolling. We've spent the first three sections covering #1, and are now looking at cutting in and trimming. This is a very time-consuming part of the painting, and we are going to look hard for exceptions time savers.

Cutting in is basically just hand painting with a brush those areas you can't get to with a roller (which is much faster). I tend to prefer a tapered edge brush about 3 inches wide. Your preference may vary, but the tapered edge I find better for making a tight cut - say around a door knob - than with a regular straight edged brush. Find your own comfort level in this area. To cut the area where the wall meets the ceiling, you'll need a step stool or small step ladder. Cutting is simply slow and tedious, especially if you get a critical line like having different colors next to each other (avoid!). Then you'll likely have to use painter's tape and still be very careful. There are two things you can do to help with cutting in:

1) Use the same color on the walls and ceiling. Ceiling paint is thinner than "regular" latex paints, and dries quickly to an ultra flat finish. However, the shades (and they are usually limited to one) available of ceiling paint seldom if ever match the standard whites that are from the same manufacturer. The result is you get two slightly different shades of white, and if you roll up too far on the wall and touch the ceiling you'll get spots that have to be taken care of. Ceilings don't need to be painted nearly as often as walls, but it does happen - if you have a heavy smoker, gas furnace, etc. a dingy film can build up on the ceiling that requires painting in order to look good. When you do, skip the ceiling paint and just use the same flat white you're using on the walls. Yes, you might have to be a little more careful of drips (drop cloth recommended for sure in this case), but we've found that to be no real problem with Kilz and other brands we've tried. Once you have ceiling and walls the same paint, when you do have to cut in there's no need to be as cautious about getting paint on the ceiling and can move along faster. Life is also simpler with one less type of paint to deal with.

2) Break the rules. If you are repainting a room that you have already painted your standard flat white, chances are that it's due to smudges and damages from eye level down, and not things that need to be repainted in the 4 to 5 inches at the top of the wall where you have to cut in. In this case, roll the room first, and then seen if any of the cut-in area needs touch up. You might be able to avoid cutting altogether (though usually there are scuffs at the bottom of the wall the require touch-up, but still much less time than a full cut-in).

Trim is what you have left; wood trim around the doors, along the baseboards, the doors themselves, etc. Trim areas tend to get touched a lot, so we typically use the satin finish rather than the flat on these. Painting trim is another, very time-consuming aspect of painting. Most people do it by hand. Along the baseboards, hand painting is almost unavoidable. You scoot along the floor doing a bit at a time (using a plastic paint guard that you nudge under the baseboard or quarter-round). You just have to tough it out. On other trim, though, there is a time-saver. There are now available foam roller brushes, typically available in three and six inch lengths. These are smaller around than standard rollers, and the big trick is that the foam will cover one end of the roller, allowing you to turn it on end and squish paint into tricky spots like the recesses on typical "cross and bible" doors. These rollers have their own, small, paint trays that are easy to hold in one hand while you paint with the other, keeping you moving along more quickly as well. You'll find that they cut your time painting doors by about half.

Two other notes:

When painting with a hand brush, a little paint goes a long way - you don't need to drag the whole paint can around with you. This is where the well-designed tops of Kilz paint come in so handy. Just put some paint in the top and you're ready to move faster. When you're through, the design causes extra paint in the top to drain back down into the container.

Get rid of quarter-round whenever you can. Quarter-round is the round trim (one-quarter of a circle) that is often put at the bottom of baseboard trim. It is placed to seal the visual "gap" that can occur between the baseboard and the flooring. It serves no physical function, it is just visual. In some cases there is such a gap that you might want it, but we've found in most cases it can be done without. Quarter-round is expensive (for what it is - which is low-grade thin pine strips), very labor intensive to put in (miter cuts in the corners), often has to be replaced when you replace carpet (because it is flush against the carpet and breaks when removed), and is very slow to paint. It also tends to pick up dirt and lint in the seam where it meets the baseboard. Without the quarter-round, that small gap means you don't have to paint so carefully on the baseboard.

The Lease II

Your lease contract, to use a little legal jargon, is an express, parol, commutative agreement. Express simply means that it has been specified, hopefully in writing, and agreed to, as opposed to an implied contract. Parol means that it was a voluntary agreement to do or not do things. Commutative means that the consideration of each party is equal - the money you receive is equal to the rental value of the property. You don't need to be a lawyer, or dig too far into reciprocal, principal, and other descriptions of contracts - they are usually specifications of what common sense understands by whatever name. But do understand that the courts have been dealing with contracts and their requirements since the first time a judge ever sat down before two conflicted parties. A lot of thought has gone into what constitutes a valid contract, types of contracts, what is reasonable vs "unreasonable" or "unconscionable", etc. This body of thought is available to you (and your attorney) in putting together a good lease contract if you need it.

You need to understand that a contract is an agreement between two or more competent parties. A lot goes into the word "competent". A minor is not competent - you cannot rent to 17-year-olds. A person also needs to be considered mentally competent to enter a contract; the threshold for mental competence is low, but if you are concerned you need to assure yourself of the mental competence of the other party. I once had a situation where a couple signed a promissory note (as option money on a lease-option) and didn't pay. The lease ended poorly, so we ended up in court. The judge was treating it as pretty cut-and-dried until the defendants starting raising whether they were competent to sign. That was a huge red light for the judge; she stopped in her tracks and began immediately pursing the competence question - as it would trump anything else. Some questioning revealed they based that defense on the husband claiming to be mildly bi-polar. As soon as that became clear, the judge waived her hand dismissively to stop them, and went back to just looking at what was written within the "four corners" of the contract. A judge would have to find a person unable make or carry out important decisions regarding his or her affairs, starkly incapable of maintaining awareness of and responsibility for their actions - and mild to moderate bi-polar doesn't qualify. However, if you believe you are dealing with a person who may not be competent, seek legal counsel before entering into a contract.

A lease contract must contain the basics, of course: names of the parties, rental amount, dates due, and length of term (other terms will take many other postings).

Names of parties: we have every competent adult who is going to be living in the unit sign on the contract. Use their full names (and it doesn't hurt to include any aliases, with a.k.a. - also known as). If you are acting as corporation, LLC, or other entity, you need to be correctly identified in the contract. If you operate as such a separate entity, then the contract is with the entity, and you are a principal. If you are unincorporated but using a business name, you are "doing business as" (d.b.a.) and that should be included. Make sure of where you really stand as a party to the contract. For example, if you are operating as a separate entity, then many courts will not allow you individually to file suits (like eviction, small claims, etc.) later. As an individual you can file suits (it's called pro se or pro per), but if the property is in a corporation, then the court may rule that only an attorney can file the suit - if you file the suit the court may consider you would be practicing law without a license.

Among the reasons that we have every adult sign the lease is so that they are all responsible for anything owed under the lease. The legal term is "jointly and severally", which means that any or all of them can be held accountable for any or all of the rent. For example, two roommates rent from you; it goes bad and one of them leaves. The other one says they'll pay their half of the rent, but you have to collect the other half from the ex-roommate. Nope; you want your contract to where they are all responsible for all of it. What if the one who left is a bum who just lost their job, and the one who stayed has a good-paying job. Why do you want to waste your time on two when you can just collect from one who is likely able to pay (and then let them collect from the other).

The term of the lease often gets no thought either, but it should. Is there a time of year when you tend to get vacancies (say when school gets out because you've got a college nearby)? Then you don't want your leases ending during that time if you can help it. There is no rule that a lease has to be for a year. Also, different properties have different considerations - houses can often take longer to lease and often (in our experience) have more damage, clean-up and paint to take care of. We decided that we were looking for longer-term tenants on houses. So we eventually settled on two-year leases for houses, eighteen-month leases on duplexes, and one-year leases on apartment units. This has helped a lot. Our bad month is December, so I try to avoid having too many leases with November or December expirations, and will use odd-length leases as needed.

Due Date: All your rents should be due on the same day. Most people pick the 1st, but maybe the 15th or some other date would work for you. I foolishly started out making rents due on the date of the lease signing - and promptly found myself spending all month long collecting rents. Have it all due on one day, then your legal notices can all be posted on one day, and you can take all the deadbeats to court on the same day. You don't want to be doing this hodge-podge all month long.

Your rent amount should be stated clearly, along with any late fees, discounts, etc. Remember, if it's not clear, then the court will likely rule the interpretation most favorable to the tenant.

Next, on to the detail terms of the lease, based on the lease we use.

Tenant Application and Background Check Part II

Yes, bad tenants want to rent from you. In a perfect world, bad tenants would just rent from bad landlords. This isn't a perfect world, and it's up to you to protect yourself as much as possible from the sure-fire disaster tenants. Your first line of defense is checking public records, newspaper articles and court records. We've found that one of the greatest indicators of problem tenants is a history of legal problems. Often the tenant will consider the legal scrapes to be minor, but if someone has a driving without insurance, a 4th degree assault and a couple of lawsuits over debts within the last few years they may not have gone to jail for any of them, but what are the chances they will be a good tenant? Driving without insurance is a very bad sign, for example; it indicates extreme irresponsibility and irresponsible people tend to not pay rent or take care of property.

Your primary tool in beginning to weed out bad tenants is the application, but there is one more tool and that is the application fee or good faith deposit. You should always take in some amount of money, whether you call it a fee or good faith. You'd be surprised at how many people can't even come up with $50 or $100 to go with the application. That's a pretty good indicator of how well they'll be able to pay the rent. Also, the ones that know they've got serious problems in their record won't want to throw away money, or at least some will come somewhat clean about their problems to see if you think they should even bother with the application. Most landlords charge an application fee; we do it a little different. We ask for a $100 good faith deposit, telling the prospect that if they are approved, all of the $100 will applied to their deposit. If we turn them down, we will return all but the $15 the state charges us for the criminal background check (saying this lets them know for sure that you will be doing the background check, and that they'll lose $15 if it's bad). We learned to take this approach because 1) "fee" is a very negative word. Nobody likes to pay fees that seem like penalties or unnecessary charges. "Good faith deposit" sounds like the start of a positive relationship and we don't keep any of the $100 if they are approved. 2) The main reason is the surprising number of people who will fill out an application with no intention of renting, or who will change their mind, or who keep looking and find something else. Foolishly, at first I didn't charge anything for the application - it seemed like a good way to attract prospects: "no application fee". I quickly learned how many of them would let me spend all the time and money doing the background checks but not rent. Many took advantage, treating it like an option - I couldn't rent to someone else for a while if they were approved, so they could keep looking around at other rentals. Now we include language that makes it clear on the application that if they are approved they must execute a lease within seven days or lose the $100.

Now on to the nitty-gritty:

Name: pretty obvious, you'd think, but we've learned to also ask for maiden names or any aliases. We've run across a number of women who got into all kinds of trouble with a married name and would later change back to using a maiden name to fool folks like us. When you get a maiden or alias, search for it just as much as you would their current name (and of course always search under variations like Liz for Elizabeth). If someone is married and won't give you their maiden name, that's a pretty bad sign.

Social Security & Driver's License numbers: obviously you must have at least the social in order to get a criminal background check done.

Email: we now ask for email addresses. It helps in communications, saves money since we can send them statements via email, etc. However, there is one more thing - while there are numerous good reasons for exceptions, we have found that in general people under 60 without email addresses are worse tenants. At the least, we consider it a plus that someone has a working email address.

Current address: often not a tremendous help, but search Google News on this address; if there has been a big drug bust or something there in the last few days, you'd at least like to know it.

Employer information: we ask for the typical employer information, address, contact, phone, number of years on the job. If they work at a fast-food place (except in management), or other restaurant, video rental, etc., then the fact they have a job is frankly not much help to you. These are fluid jobs that have constant turnover; even if they say they've been there for a few years it doesn't really help. We have found a disturbing pattern of tenants losing or leaving jobs right after we rent to them. Either they are good at faking, or more likely they realize that the end may be near and if they want to look good on an application they need to act soon. Whatever it is, job stability isn't a given. You do at least want them to have a job or source of income like disability, of course. If it's a tough call on whether to rent, then you need to contact the employer and ask frankly about the applicant's chances for continued employment. They won't come right out and say "we've had enough, they probably won't be here another week", but you should be able to read between the lines. We also ask for previous employer contact information. While not overly helpful, it does give you a better overall picture of their history. If they were only at their last job 6 months and just got a new job, it could be a bad sign.

Current landlord information: we ask for the typical contact information. Of course, if the applicant is a bad tenant, the current landlord probably is happy to see them go and won't say anything too negative, so they may not be the best help to you. If they are good tenants, the landlord may not want to let them go, and may pretend they are bad to scare you off. While we only occasionally call previous landlords, the fact that someone else rented to them is a little positive. Interestingly, in all my years of managing property, we have never gotten a call from a new landlord on one of our current or former tenants to get a reference. There are many who would have benefited from giving us a call. Also beware a scam that we have run across more than once: the tenant preps a friend or relative, maybe even getting a temporary cell phone just for the occasion. When you call, they pretend to be the current/former landlord and tell you that they are wonderful tenants. It has happened to me. Sometimes it doesn't hurt find a way to confirm that the landlord phone number they give you is really their landlord. Apartment complexes will be listed in the phone book, for individual landlords, maybe try a reverse phone number lookup on the internet.

Previous landlord information: this is where the good information is often found. The previous landlord will be more honest with you since the tenant is no longer with them. When we call, I'm more interested in what the previous landlord says than the current one.

Personal references: like most, we ask for two personal references and their contact information. We don't actually call these folks - you know that the applicant isn't going to list someone who would say anything but the nicest about them. The secret here is that this is an old bill collector's trick. Later, when the tenant has skipped and you are trying to track them down, the folks they list as personal references can be a great source of information - often that's where they are living. There is one more trick to this; we also do a quick computer search on news and courthouse records for the people listed as references (don't order criminal background check, that's probably not legal as it requires their consent). The reason is this: birds of a feather. If your prospect lists as references people with a bunch of convictions or lawsuits for debts owed, that's a terrible sign since people tend to gravitate to the behaviors of those with whom they most closely associate.

Auto information: you want to get the make, model and license tag number of the vehicle(s) they plan on parking on your property. This is important for controlling parking, but also lets you know something about what is likely their biggest asset (you also want to ask if they own or lease). You will know about what is appropriate for people living in your properties to drive. If they put down that they own some expensive late-model car and your rental would be more appropriate for something a little more modest, you might be dealing with someone who doesn't handle their finances well (or worse may be making money illegally and your modest rental is going to be the front). On the other end, if they are driving something that is falling apart and it turns out they don't even own it - say they are 40 years old, but the car belongs to Mom or Dad - that tells you a little about how far along they are financially. While you don't want to read too much into what they are driving, it does give you another piece of the puzzle.

The big four questions: "Have you ever been convicted of any misdemeanor or felony? Have you ever been evicted or sued for unlawful detainer? Do you owe on any judgments, including child support? Are you currently behind on any bills or payments owed? If Yes to any, give details." It's not that you would say "no" automatically in any of these cases, but you want as complete a picture as possible. Someone may never have been convicted of any crime, but if they've got 3 evictions in the last two years, you probably don't want to touch them. Being behind on some bills may be due to a recent divorce or medical emergency, and not indicative of their general payment history. You have to make a decision as to how relevant each of these is to your applicant's likelihood of paying you on time.

Also ask: how did you hear about us? It's always good to have some idea whether it was yard sign, classified ad, website, referral, etc. that's getting you applicants, especially ones that look good. A whole other topic would be your website, but we've found that an informative website brings us qualified prospects.

One thing we don't look at in the application is a credit history and score. It costs money to get these, and though many would think otherwise, the information is of little value. Unless you are renting high-end properties (in which case you probably should do a credit check), you are dealing with people who either have bad credit or no credit. Credit scoring, though sworn to by lenders, is actually quite worthless in telling you anything about creditworthiness. The formulas for the Fair-Isaacs credit scoring formula were developed years ago and were rather sophomoric then, let alone in modern life which has brought many changes to people's financial lives. If someone is really in deep on their bills, you'll see civil lawsuits in the court records. You can add a fifth question, which is "have you filed for bankruptcy in the last seven years" or something similar. Of course, most bankruptcies are due to divorce or medical bills, which means it still doesn't really tell you much. We have also found that in some cases people who have filed bankruptcies are better able to pay; they have eliminated or cut down debts and they can't file bankruptcy again for seven years meaning that they can't bail out on what they owe you until that time is up. We consider bankruptcies, but only after determining what led to the bankruptcy. If it appeared to be financial mismanagement, then that is a real danger sign; if it was divorce, medical, or other singular event it may not be so bad.

Bottom line, some people over-emphasize employment and credit score for renting, but we've found that the best indicator is in the court records - someone with DUI's, driving without insurance, civil suits over debts (unrelated to divorce and medical), misdemeanors, and of course felonies is going to be the highest risk. This is a better indicator that rental history (except if they've been evicted), job history, credit score, etc. even though all those help give you a big picture.

The final thing I do is when something goes really bad with a tenant, I go back and look at their application - was there something we missed, was the tenant able to cover up something we would like to have known, etc. These help develop questions and procedures you might want to add to your application process in the future.