Dallas-Fort Worth Real Estate Investor Club

Congrats on your first property.  I think the $100 deposit is much too low.  I require one month's rent as a deposit, and I require $300-400/pet additionally, no dogs > 25 lbs and no aggressive breeds (there are few insurance companies that will insure a property at all if you have certain breeds present).  Some landlords make the pet deposit non-refundable, but I make all deposits refundable.  I think this balances my interests and keeps the pool of potential-tenants sufficiently high.

Speaking of deposits, be sure to inspect your property occasionally, and if there is damage the tenant should repair it or be billed at that time.  Many tenants say they will repair the damage when they move out, but you should require it to be done or paid for in a more immediate time frame.

I don't require renters' insurance, but I let new tenants know that my insurance doesn't cover their property.  There is also a check box on the application where they indicate if they will have renters' insurance or not.  You/your manager should make maximum reasonable (an oxymoron, perhaps) disclosure to the tenant(s) BEFORE they sign the lease, and anything not disclosed on the lease should be on a separate list of disclosures and signed by the tenant.

Regarding your manager, I would not give her a debit card just because it is too easy to abuse.  I also pay with a credit/debit card over the phone when my maintenance person goes to Home Depot or wherever for parts.  You can handle the entire matter on the spot this way.  If the vendor doesn't take over-the-phone payments, use a different vendor.  As far as I know, your manager should also be licensed and should have access to standardized forms/agreements.

Speaking of which, how is it that the manager lives on-site but there are two vacancies?  Managing one property is not difficult, and you can probably do it yourself.  If done properly, rentals run themselves once you put the systems in place.

By the way, I'm not an attorney or any kind of certified.  I'm just a private landlord who has learned many lessons the hard way.

Michael Little wrote:

I'm closing on my first property Wednesday--a fourplex.  The bottom units are occupied, and the two units upstairs are vacant.  I have some questions I would like to throw out there.  The last owner only required $100 deposits.  That seems low to me.  Should I require a higher deposit?

Also, do you require that your tenants have renters insurance?  I heard that their liability policy kicks in before mine does if they burn the place down or something, and that it's not uncommon for landlords of multifamily properties to require renters insurance.

The manager lives onsite.  She said she used to get supplies at Lowes and call the owner in California and the owner would give the cashier her credit card#.  I would rather set up a petty cash account and give the manager a debit card.  What do you think? 

I would like to find an agreement between owner and manager, and also a good lease agreement for my manager to use.  The current lease agreement forms she uses are quite simple.

Thanks,

Michael

Best lease agreement in my opinion is the TAR lease agreement but she can only use it if she is a member of the Texas Association of Realtors.  I think the apartment association has a good one too but it too requires membership.  As far as the agreement between owner and manager that is another form that already exists and she should have access to it if she is licensed.  Let me know how I can help and if you no longer want to use her because her agreement expires when the property is sold then I can do a walk thru and let you know how I can support you....Take care my friend and you have my number and I have tried to call you as well...

I wouldn't give a debit card or my credit card to anyone! I buy materials from HD or Lowes online, send the receipt to my handyman then have him stop by to pick up. If materials don't cost much, they'll usually go buy what they need and I reimburse them.