Decades ago I got a phone call from a debt collector a few weeks after I’d moved into a place. I explained that I wasn’t the person they were looking for, gave him my name, etc.
Turns out I recognized the name of the prior tenant and even knew exactly where he was living! I asked the debt collector if I’d get a finder’s fee for the information and he went on a verbal rampage about how I had a legal obligation, he’d call the cops if I didn’t cooperate, etc. I hung up.
Shortly after the call and a few more, I got rid of my landline.
I’m curious how they do that. My wife and I rent out our old 1 BR (in NJ) and the realtor who finds us potential renters does a pretty thorough background check on them.
I’m not privy to all their tricks, but in general, they make themselves look presentable and affluent, spin a good story, and may either back it up with forged documents or just count on the landlord not being thorough in their vetting. They also tend to be very knowledgeable about how oversight bureaucracies like Landlord-Tenant Boards work and position themselves to take maximum advantage.
Here’s an example that’s a bit atypical but illustrates the general idea:
In our case, I’m guessing the step-son didn’t do a thorough background or references etc. were falsified or covid played a role. They had been in there for six years but collecting rent was a problem from the beginning. I’m guilty of the same thing myself with my single rental. I got desperate for a tenant and ignored some red flags. She’s still in there but things have settled down. One I thing learned is that, if you allow rent to be paid late without penalty (and I have), it can be used against you if you go got court to evict for late rent. So, landlords are forced, by law, to be “mean and uncaring”. No good deed goes unpunished.
I show my caring by allowing tenants to get out of their lease (which we’ve done). We’re fortunate though that our property is in a market where there is a constant flow of young professionals looking to rent for a few years. And the unit is paid off so there is little financial risk to us at this point. They can be pains in the ass sometimes (mostly complaining about noisy neighbors which isn’t really my problem), but they mostly pay on time.
One of my friends owns a bunch of properties in Brooklyn with his business partners and he’s always telling me these crazy stories about some of their renters.
Given all the risks and the headaches associated with being a landlord, one wonders why anyone would continue to hold onto a home they don’t intend to live in themselves.
For us it’s been relatively low risk and low headache. Maybe a few times a year I deal with a minor maintenance issue. But now that the unit is paid off, that’s an extra $2,500 a month for not a lot of work. And because of the close proximity to Manhattan, that income is only going to increase over time.
With my rentals it is a per day late fee ($15) not just 1 lump fee. Vary rarely have we had an issue with late rent doing it this way. Although a few years ago we had a tenant that gave a months notice that they were moving out (bought a house) but after 1 1/2 months and the current month unpaid they basically begged us to renew their lease, the house they planned on purchasing had serious undisclosed issues. We agreed with the understating they would need to pay the current months rent plus the late rent penalty which would have been about $150.00. When the tenant came to pay I found out that the state I live in (Iowa) caps the late fee at $60.00 per month for the rate rent I was charging.
As far as the O.P. with my experience I have found out you can’t get blood from a stone. If they don’t (or claim) they don’t have the money to pay they won’t pay it even with a court order. As being “professional tenants” they probably know more about how to skirt the law than a lawyer would.
When I have an empty unit I rarely advertise a “for rent” listing. I rely on word of mouth or recommendations from the tenants themselves or friends/family/coworkers. If the professional tenants/scammers don’t know about a property for rent they can’t apply.
That is correct. It’s a 4 story apartment building consisting of a mix of renters and owners. We only own our 1 BR unit. Everything outside the walls of the condo is the responsibility of the building maintenance staff.
Funny story. We rented to this one young couple where the girl’s dad was a lawyer. Her dad used to constantly send these legal memos to us, other landlords any time something displeased them. The tenants got into a big argument with the upstairs neighbor over noise and sent a bunch of angry legal letters to their landlord. Problem was they didn’t realize each floor has a different floor plan and 4 J isn’t directly above 3 J, so it was the wrong unit. As it happens, the landlord they were arguing with is one of the biggest developers in town and lives on their floor. So it was pretty awkward for everyone.
Not so much greater knowledge of how as willingness to skirt the law. Even a destitute attorney must operate under the implicit threat of being suspended or disbarred for abusing the courts.
Anyway, I think landlords who are relying on someone else to pay their mortgage should maybe get out of the landlord business.
By that logic, only landlords who own their property outright or can afford to have rent go unpaid, should risk renting. I think its more a matter of landlords relying on someone fulfilling their legal obligations. Naïve, perhaps, but entirely reasonable.
Unfortunately, I have certain unstated premises (and conclusions) which I believe would be beyond the scope of this thread. But I said what I said, and I stand by it.
I have rented from several landlords in the past who only owned the one place (the one I was renting). In every case they were making almost no money on the rental. What they were getting was “free” equity in their property. Basically, I was paying their mortgage. Presumably, at some point in the future, they’d sell the place and collect their profit. The $50,000 in rent I paid went into their pocket. Just delayed.
I doubt any of them would be ruined if I didn’t pay my rent for a few months. It’d suck for them and they would not be pleased but they could manage it. (FWIW I have never in my life missed a rent payment)
A lot of “accidental landlords” may not have much cash flow (Rent less Principal, Interest, Taxes, Insurance and Maintenance) but hundreds of dollars of their outflow is paying down the mortgage balance. That’s profit by any reasonable definition.