Hi all
Quick note here. I got the PC.. $477 (with data transfer and they were able to recover all my data) I feel good. and WOW.. fast.. more efficient all of that.
3 unit status
goal- raise rents this year across the board at the 3 units so my negative cash flow is reduced by $400 a month
goal-raise laundry income or pull out laundry coin op
1. 4 rents are in in full
2. 1 rent is $10 short and is on a payment plan for $766 back rent
3. one guy has not paid at all. coincidently it is that guy the old property manager put in last month with the long delay to move in, upset, angry calls etc. I am contacting her about breach of duty. this guy denies filling out the application (which means SHE filled it out which I suspected) and his financial situation has not changed yet he has not paid the rent and is unable too. Clearly no due diligence was done and just lies and lies. I called to confront her on other stuff last Friday the conversation got heated and she eventually hung up. I will contact her again today. she is refusing to provide receipts and I believe stole supplies. This lady is like 65 year old.. crazy!!very upsetting. In addition the lease is in the name of the old property manager so it is hard for my new property manager to do the court paperwork for me. I like to avoid court though anyway.
5. currently late fees are not being charged at all
6. rents average around $570
7. all units are the same, large light and bright one bedrooms
PLAN
1. notify everyone late fees start Feb 1
2. have new PM evaluate laundry usage thru March to either raise prices or close and sell equipment (does not pay for itself now)
3. get person with a rent backlog on a written payment plan-encourage her to move out
4. make contact with non paying guy. get whatever we can from him and encourage him to move out
5. let everyone else know all rent renewals will be at $630 and new move-ins at $650. Advise if they want to move out early before lease end date there will be no penalty if we get 30 days notice and can show while they are in there.. otherwise we take full security
new tenants will put down 1.5 months security.. $975 so we are better protected or maybe $800
A little rough sailing ahead but onward
3 units status and plan.
January 20th, 2015 at 06:04 pm
January 20th, 2015 at 06:55 pm 1421780116
Double check with your lawyer - I am not sure if you can change the terms of the original leases signed until they are 13 months out (when agreement becomes month-to-month, per state of IL). Also I am not sure that you are actually able to keep someone's full security deposit because they aren't amenable to showings and there isn't damage to the apartment - seems rather punitive, especially if its not in the terms of the lease they assigned. You might want to clarify those points before telling people. Some it doesn't sound exactly right to me ...
January 20th, 2015 at 07:05 pm 1421780718
If you have any good tenants, I would not raise their rent by $60. I would raise significantly below market rents in stages. Anyone you want to keep should get a rent increase of 5 percent or less. Wait a year and increase the rent again by 5 percent. Their wages or benefits did not go up by the percentage increase you propose and they will be motivated to move if you do it all at once. You will have vacancy and risk not getting another good tenant.
Anyone you do not want to keep should be told their lease is not being renewed at whatever the date is for the renewal notice. Those units can be renovated and listed at the higher rent.
Are late fees in the lease and just not being enforced? If not, you can't add them now. You need to add them at renewal.
I would talk to the tenants before removing the laundry machines. Perhaps there is a reason they are not using them that could be fixed. Is the area secure? Is it properly lit? Are the machines clean and in working order? Is the cost the same as the laundromat down the street?
Good luck getting the higher security deposit. Your state may have laws governing the amount of the security deposit. If not, the market will tell you what you can ask. If every other landlord asks one month security deposit, then those units will rent before yours do.
Just the thoughts of a long term landlord....
January 20th, 2015 at 09:03 pm 1421787789
1. Late fees ARE in the lease, old PM had a verbal agreement and did not enforce them if they paid 'something' by the 5th and sometimes they were not enforced at all.
2. I am ok with losing some folks. Rent is WAY below market.If they are scraping by and can only pay below market rent I do not want them. No people are 'wow,. let me keep this guy'. There are ample tenants like these and several 'good tenants' with adequate income too. I am not concerned with finding tenants.
3. We are sending out a note that says that renewals (when their renewal date come up) will be at $630. We are not raising rents mid term. I am sending this out so if they want to leave early (easier to rent for them and me in the summer) then they can. I will let anyone out who wants to leave early with no penalty if we get 30 days notice they are leaving and are able to access the apartment. If they just get the 'raising rents' notice and leave in the middle of night, I will keep 100% of their security for breaking the lease. My early notice is a service to them and helps me too.
4. a month and a half security is within guidelines here and people should be able to have it,.. maybe we need to lower it to slightly less but I am definately not only getting $500 per unit which is what I have now and not adequate with the quality of tenant
So rough road, you may not agree and maybe this assertive stance may not work but it is where we are starting. Stay tuned.
January 21st, 2015 at 02:11 am 1421806285
No one leaves in the middle of the night because they got a 30 or 60 day renewal notice with a higher rent. They might start looking and ask if they can leave 30 days early, but they don't up and leave when the notice appears. You may have trouble getting the last month's rent out of some of them, because they know you have the security deposit.
I'm not saying you should not raise rents or you should not price your vacant units at market after you bring them up to market standards. My two cents says this all or nothing approach with existing tenants will cost you more than you will gain and you will regret doing it.
January 21st, 2015 at 02:37 pm 1421851054