RentPrep Podcast #424

In this week’s podcast, Andrew Schultz discusses pipe bursts in rentals and whether or not the tenant or landlord is responsible for the costs.

Find out how to properly collect application fees if you are an out of area landlord trying to collect payments from possible tenants.

And, last, but not least, find out if landlords can charge for water and sewer even if there are no separate meters.

Show transcription:

Andrew Schultz: (00:00)
There we go. We are officially live. Welcome everybody to the February 2024 Ask Me Anything Session brought to you by Rent Prep. I’m Andrew Schultz, community manager here at Rent Prep. I’m also a licensed real estate broker in the state of New York with over 15 years of experience in the property management and rental property industries. I have Josh with me. Josh is the marketing marketing manager or marketing director at Rent Prep.

Josh: (00:27)
As of recently the product marketing manager, so product marketing manager. So I dabble, I dabble a little, a little bit more into the product now. As long as well as the general, the general marketing day-to-day operations that we go through.

Andrew Schultz: (00:42)
Mm-Hmm. And then Josh is one of the people that I interact with most frequently over at Rent Prep. We also have nobody’s ever, has Ashley ever been on one of these?

Josh: (00:53)
No. No. Ashley, she’s behind the scenes. Never, never been on one. But Ashley has some property, not property management. Well, I, I guess you could say a little bit of property management experience. And she’s, she’s got some experience in the retail industry, but she is our, she is my go-to I guess, Batman, Robin, kinda other marketing specialists that we have. Very knowledgeable.

Andrew Schultz: (01:19)
Yeah. And she handles a lot of the newsletter and yep. Helping to make sure things get posted promptly and stuff

Josh: (01:25)
Like that. Yeah. So, yeah, you’ll a lot

Andrew Schultz: (01:28)
Questions for the AMA session. So nobody ever sees Ashley, but she’s always hard at work. Whenever it comes to anything Rent Prep, marketing related.

Josh: (01:35)
She likes to keep a low profile.

Andrew Schultz: (01:37)
I don’t blame her.

Josh: (01:38)
So she yeah. She doesn’t like all the all glamor like we do on these on these podcasts or the AMAs. But yeah, she’s she’s the Go-to, you’ll probably, if you subscribe to any of our newsletters, I think you’ll see, you know rent revenue newsletter from Ashley here and there. So yeah, Ashley’s she’s building all those each week custom to just kind of what’s going on within, the retail industry or, or the real estate injury industry. And, you know, she’s, she’s locked in, she’s always laser focused and, and pushing out good content.

Andrew Schultz: (02:13)
Absolutely. Yeah. And she does a great job too, to make sure we get the content out to as many people as possible, so. Oh, yeah. Trying to think of what else we have going on. I think we just posted, I know a couple of videos just went up. I know that the day in the life of a Property Manager video is up now that’s on our YouTube channel. Yeah. That was a fun video for me to do. I really enjoyed doing that one. Yeah. ’cause It’s kind of interesting for me to kind of shoot film as I’m going through my day. It’s a very different experience than a more traditional planned video would be. And I had some stuff that was planned in that video, but there were a couple of things that were certainly unplanned as well. It was a good video. I like that one. I think we’re gonna try to do more of those in the future.

Josh: (02:54)
Yeah. I took I took a look at it, just the live version or the final version of it. It was, it was interesting. I do, I do think, and I saw a couple comments on it already that viewers were finding a lot of value in just more so that day to day, like you said like things just coming up throughout your day that you’re kind of addressing. And it gives it more of a, gives it more of a real realistic feel and more people can relate to it. So I think that content is definitely something We’ll, we’ll keep trying to push.

Andrew Schultz: (03:23)
Yeah. And it’s, it’s interesting from, like, from my standpoint, being a small business owner operator, like, I often get to the end of my day and I’m like, I didn’t get anything accomplished today, and then you sit and look at a video like that, that was just one day, like, that was one day in the life of our operation, and it was just my day. Mm-Hmm. , like, there’s other people inside the company working as well, obviously. So it’s, we don’t realize how much we actually do on a given day unless we sit down and look back at it and, that’s, we cram a lot into our days here.

Josh: (03:55)
Yeah. No, I, I feel I, I almost feel that way every day here, but yeah, there’s so many, there’s so many, you know, fires that you’re putting out you know, real-time situations that you have to react to and, and Mm-Hmm. prioritize and address. And I, I feel like as you know, someone who manages properties, like you never know. You just, you just don’t know what’s gonna come up and, and what a productive day is, isn’t necessarily just accomplishing every single item you had on your list starting the day, but it’s, you know, it’s being just reactive to kind of what’s going on.

Andrew Schultz: (04:27)
Well, and some days the, some days the things that you have on your calendar are immediately thrown out the window, like, you just walk in and something’s going on, then that has to take precedence over whatever else happens to be going on that particular day. And sometimes the schedule flexibility is, is important. So I think last time, last AMA we had just finished, just got through that blizzard, right?

Josh: (04:52)
Yes. So what, it was only a couple, it was a couple weeks ago. We did it late couple weeks ago. We did it late January for this one. Yeah. And then we came back with the early, the early February. So yeah, we had just gotten yeah, we had just gotten through that other, the next blizzard and yeah, it was it was crazy.

Andrew Schultz: (05:09)
So I think it was actually, I’m pretty sure it was that day. No, it was the following day. So we had the AMA the following day that evening, Tuesday night, we had that was the beginning of our storm damage. This actually ended up being the most damaging storm that I’ve experienced in my time in property management. And I’ve been doing this like 15 years now. So for this, you know, that’s, that’s saying something for this to be the most damaging storm after the snow. So we ended up in our worst impacted areas, we ended up between four and five foot of snow. And unfortunately, one of our worst impacted areas was South Buffalo, where the housing stock is very old, 1880s to 1920s, built for most of these properties. And they have super steep roofs, and they’re packed in tight.

Andrew Schultz: (05:58)
It’s very difficult to get in there to work and do snow removal and stuff like that, or work on ice dams or anything. And we had two really bad situations. We had one where a gutter came down and took the, it was the gutter, the fascia, the soffit landed on a neighbor’s fence, caused a bunch of damage. So that one is, that one’s a pretty substantial one. Yeah. And then even worse than that, we had another one that came down, took the gutter fascia soffit, and the electric service meaning the house had no electric service at all. Oh my God. And we also, yeah, it, like, it tore out the electric service and it landed on the tennis car. So that was a much more involved, much more in-depth situation that we were dealing with last week. And then we had on top of that, I think it, I think the grand total were up to is nine or 10 properties that sustained some flavor of damage. Most of it’s gutters and downspouts and stuff like that. Some of ’em are more severe than others, but holy, holy crap. This is by far the most damaging storm I’ve been through in, in my property management career. And not, not for nothing. Like, we had two major snow events last year. We had the five foot at Christmas, and then we had seven foot, I’m sorry, five foot at Thanksgiving, and then seven foot at Christmas. Mm-Hmm. Yeah. And we didn’t, we had like one down gutter from both of those storms come out

Josh: (07:17)
I know. So I

Andrew Schultz: (07:19)
Know the weather really screwed us on this one because it got cold and then it got just warm enough to start melting stuff. Yeah. But then it would refreeze and snow was turning into ice and hanging off of gutters and all of that weight, just, it did a number on a lot of our properties. So we spent a good of that week just chasing storm damage, unfortunately.

Josh: (07:41)
Yeah. No, I yeah, it, it’s crazy. We were talking a little bit just be before the the session here, but yeah, you just between the storms, like yeah, we had those crazy major storms last year and honestly got out of it with, and there was some damage, but really, really nothing. Right. Nothing crazy. Like on, at least from my end you from your property management business, you know, nothing on, nothing really on our ends. And then all of a sudden you get hit with this, you know, this one week one that we got, and like you said, a little bit of it was warming up, kind of freezing a little bit of different, and all of a sudden you got all this damage and you just don’t know what you’re gonna deal with. I wanted to make a note there.

Josh: (08:20)
I feel like, I feel like as soon as it starts getting cold here, we, me and you just start hammering the, the storm talk and everything like that. Yeah. And, and always the winner. And, and I wanna make it known out, out there to all the listeners, the viewers, you know, we we’re interested in kinda what, you know, what you’re dealing with in, in your in your area. So, you know, not necessarily snow, but anytime anybody’s got any sort of story like this or, or any damage or any situation that they’ve dealt with due to just weather or just, you know, stuff out of our control. We’d love to hear it.

Andrew Schultz: (08:51)
I’d really like to talk to somebody who went through the storm in Texas, that winter storm they had in Texas. Yeah. Where they lost about half their power grid and pipes were freezing and breaking all over the place. I’d like to talk to somebody that was living, like managing property or owns rental property in, in that area in Texas when that was going on last year or the year before. That was a pretty crazy situation.

Josh: (09:11)
I know, I know. I feel like just living in this area and just the, the northeast here, we, we just are all, you know, snow damage, that kind of stuff. Like that’s, that’s kind of all we’re, I find myself focused on. And then I’m like, oh, wait, well, there’s other areas of the No, absolutely. Other areas in the country that are dealing with, you know, whether it’s flooding, whether it’s, you know, wind, whether it’s, you know, stuff like that. It’s,

Andrew Schultz: (09:33)
It’s just. Well, and I can, I can remember taking a I think it was a keynote speaker. I don’t think it was a class, I think it was a keynote speaker at one of the NPA conventions that I was at, was talking about how to respond in an emergency sit situation like that. And they were specifically talking about a hurricane that they’d experienced and the steps that they went through and getting staff to places where staff can go to work while their home is, you know, unavailable. Yeah. Or the office is unavailable and stuff like that. So there’s a lot of Mm-Hmm. work that goes into the pre-planning on this stuff. And I actually, before I got into real estate full-time, I was heavily involved with the fire department, and I have a degree in criminal justice, so I have a lot of experience in like that pre-planning activity and kind of thinking through scenarios, which helps a lot in the property management world. But it also surprises me how many people are just completely unprepared in the event that something happens. And I’m not talking about tenants, I’m talking about other landlords and, and property management companies and stuff like that, that just have not taken the time to put any sort of plans in place for when the, when it hits the fan, you know?

Josh: (10:43)
No, for sure. And then I was gonna say, do we, I’m thinking back, do we, have we have any content on, on the on the site about, just about just preparing, I guess, for, I guess, emergency planning as a property manager? I don’t know if, do

Andrew Schultz: (11:00)
We do based on that? I know we’ve done some on I know we’ve done some work on like winter and summer prep, getting places ready for winter, getting places ready for, ready for summer. Yeah. But I don’t think we’ve really done anything on like emergency prep and stuff like that.

Josh: (11:14)
Yeah. That, that would be interesting. I’ll, I’ll have to talk to Ashley and the team and just see, you know, see what we can come up with, whether it’s some blog resources, maybe based on just area and certain Mm-Hmm. , you know, occurrences that happen. Maybe, you know, we can get something together and eventually do maybe a video on that, but

Andrew Schultz: (11:30)
Yeah, for sure.

Josh: (11:32)
Yeah. I’ll talk to Ashley. But let’s let’s jump into, why don’t we jump into the questions for this week. Okay.

Andrew Schultz: (11:42)
Let’s see. See, where do you wanna start?

Josh: (11:44)
Let’s start with the form submission questions, obviously. Yeah. Let’s start with the form submission questions. Obviously, these form submission questions come in from Ashley sends out, if you’re on the Rent Prep for Landlord’s email list, Ashley will send out an email a couple weeks before or a week before the event, and these you can submit your questions live for us to answer. And these are taken directly from there. So let’s, let’s start here. Let’s start with this question from, let’s just go right in with Angelica. She asks, in California, can I keep tenants deposits if she’s breaking the lease early?

Andrew Schultz: (12:20)
So I don’t know the law in California. I can tell you in New York, if they’re breaking the lease, you have a duty to release the apartment. The tenant’s still gonna be responsible for the rent and the utilities and any damages that occurred at the property when they were living there. But you have a duty in New York to release that apartment to mitigate damages, is the way it’s worded in the, in the legislative language, I believe. And I would assume that there’s probably something similar out there in California. I would say that’s probably one where you’re gonna wanna double check your state law to see what the requirements are. But yeah, for sure in New York State you can certainly keep the deposits if there’s damages or unpaid rent or unpaid utility costs or anything like that. So I would assume that that’s pretty much gonna be universal in most states. Just double check your, double check your loss, you understand what you, what your obligations are. You may have to send a letter to the tenant stating that you know, where the deposit’s going, what you’re using it for, things like that. A security deposit disposition letter. Other than that though, I would just make sure that you’re covering your bases that way.

Josh: (13:27)
Way. Yeah. Gotcha. Yeah, I lo I, I ducked out in between that first question. I’m having a little, I think I might be on my end. I’m having a little bit of maybe wifi issues going on over here, but

Andrew Schultz: (13:37)
I think you are. Yeah. But it seems to be okay.

Josh: (13:40)
Yeah. Let me know if I, if I start to get choppy here. But we will, we will roll on.

Andrew Schultz: (13:45)

Josh: (13:46)
Alright, let’s, let’s jump into a Facebook question. Obviously, Facebook questions coming directly from the group just scouring kind of the kind of the posts that we have and some of the more popular ones that people are responding to and, and grabbing those from, from the monthly. For the Facebook questions, let’s do, let’s do this question from Jimmy. Jimmy asks, I’m thinking about, I’m about renting out my two spare bedrooms, not furnished for $750 each and ask for $55 background check. How much of a deposit should I ask for?

Andrew Schultz: (14:27)
So I’m, we’ll just skip over the background check part of it. I’m not gonna go into double-check your state laws, blah, blah, blah. Yeah. Because New York State caps out at 20. Yeah. If you’re gonna run out two spare bedrooms, unfurnished, and you’re asking seven 50 a month in rent, I would probably ask seven 50 for the deposit as well. And again, that’s one where you have to check your state laws. Different states have restrictions on what you can charge for a deposit. We used to be able to charge first last in security in New York State, and that’s not an option anymore. So it’s worth knowing what the laws are in your state so that you know that you’re compliant. And other than that, I would generally make the security deposit at least the same as one month of rent.

Josh: (15:05)
Yeah. Oh, that makes sense.

Andrew Schultz: (15:08)
Actually, lemme bring that backup. It’s I’m pretty sure all three episodes of our house hack series are on YouTube at this point.

Josh: (15:17)
YI believe they are.

Andrew Schultz: (15:20)
I’m gonna pull that up real quick. Lemme

Josh: (15:21)
Check. Yeah. See if the third one’s on that. Yeah, see, yeah, I was gonna say

Andrew Schultz: (15:26)
At least the first couple are on there. Let’s see. Actually, it looks like it might just be the first one that’s uploaded right now. So we are in the middle of doing a three-part series on house hacking and how to make your house hack work, how to finance a house hack. What is a house hack? We go through the basics. We go through finance, we go through operations, and that’s a three-part series available on the YouTube page,

Josh: (15:52)
Yeah. All right. Yeah, I, I think those, maybe the next two, we can check the schedule there. I, I don’t know when the next two are, or the second one and the third one are supposed to be, supposed to be published for that.

Andrew Schultz: (16:06)
I know that they’re recorded. I think second one is edited and ready for post. I think the third one might be in Got it. Edit right now.

Josh: (16:15)
Got it. Got it. Alright, let’s jump let’s jump back to a form submission question from, let’s do Annette. An that says, hello, I am a big fan question about application fees. I am based in New York City and know that the maximum application fee is $20. How can I collect this fee? Is it done in person when someone comes to see the apartment for the first time and wants an application? Can I collect the $20 via cash or Venmo or any other method? Is there something I need to keep in mind when taking the fee? Do you practice this in your business? Thanks.

Andrew Schultz: (16:50)
So I’ll talk about a little bit, and then I think I’m gonna kick it back to you for, for what Rent Prep has for options. So the way we do it in our office, we’re a Rent Prep customer. Own Buffalo is a Rent prep customer. We use the QLP platform, which means that Rent Prep actually hosts our rental application and everything, and it’s all tied into the same, the same system so that we can run our credit and background checks that way. Yeah. We have that set up such that we have our own merchant account and we charge the $20 application fee when someone applies. And then we pay Rent Prep out for the services that Rent Prep charges us for. And it’s more than $20. Like sucks, but it is what it is. I would rather know that we’re getting all of the information that we need to make a good decision, even if it costs me more than, the maximum application fee that’s been set by the state of New York.

Andrew Schultz: (17:39)
And actually, it’s worth mentioning, we can’t call it an application fee in New York anymore. You can’t have application fees, you can have credit and background check fees. So that was, that was the thing. New York State doesn’t want you charging for an application and then not running a bit a credit and background check. Yeah. So if you’re gonna run, if you’re going to run a credit and background check, you can charge for it maximum $20 or the true cost of what the service cost you if it’s less than $20. And there’s some other restrictions, you have to provide a receipt and this and that and the other thing. But that’s how we do it. We actually collect it from the tenant at the time of application, and we do it all through our application system. You can handle a number of ways. You can, you can collect cash and give ’em a receipt. You can do a Venmo, PayPal, whatever to get a receipt.

Josh: (18:26)
Yeah. And that’s, I was gonna say from a REM prep retail perspective, we do have I believe we do have the application the application form within our landlord form bundle. There may be, there may be one in there. I think there is, but Yeah, you can, I was gonna say, you can, you can issue that and then issue them a receipt if you wanna do it that way. But yeah, or you can, like, if you were in higher volume, like using QLP products like you kind of are Andrew, right? You know, it’s obviously baked into that product. So you know, as long as you’re following your, your local you know, your regulations and guidelines for, for what area you’re in, your state guidelines you know, there’s a, there’s a number of ways you can do it, but definitely look into the amount you can, you can charge for that.

Andrew Schultz: (19:12)
Yeah, for sure. And Rent Prep does have options on the website for tenant-paid options as well. Yeah. So it’s worth going out there and taking a look to see what services are available and what the costs are. Yeah.

Andrew Schultz: (19:24)
Is there anything I need in mind when taking the fee? Do you practice this in your business? So, always get an application, always get a credit and background check fee when you’re running a credit and background check. If you live in a state where the maximum amount is capped, keep that in mind. If not, I would charge whatever you think is fair and justifiable. I mean, we used to charge we used to charge $200, but it was a holding fee. I’m sorry, a holding yeah, holding fee. It wasn’t a deposit. So what we would do is we would run the credit and background check, and once they were approved we would roll that $200 into their security deposit basically. And it was basically like a holding fee. And then if they decided they didn’t want the apartment, then they would forfeit the, the $200. And when New York State changed their regulations, that’s when we started doing the $20. Which I don’t love it, but it is what it is. Those are the rules here where we practice business. So that’s, that’s what we’re doing.

Josh: (20:25)
Right. Got it. Love it. All right. Let’s go back to, let’s go back to a Facebook question. My I’m moving in like slow motion on the screen here, . My, my mouth is you on my screen? Okay. I’m talking and like, my mouth is moving a lot slower than what my, what I’m actually saying. So I’m hoping it, it looks alright.

Andrew Schultz: (20:48)
You’re slightly, you’re slightly outta sync, but the audio is crystal clear. We haven’t had any audio drops,

Josh: (20:52)
So all beautiful. Beautiful, beautiful. All right. Let’s see this question from Naven here. Tenant sign. It’s a Facebook question. Tenant sign, the agreement moving date is in a week now. They can’t move at all. Nice people. The background was good. Agreement was for six months. If, if it’s, it states to pay for all six months for contract break, how you, how would you guys handle this? I declined several potential tenants. Now, first time facing the situation, share your experience or insight.

Andrew Schultz: (21:30)
So I don’t know what state he’s in. And this is one of those situations where the state might have specific rules for when someone has signed the lease but has not taken possession of the apartment yet, which it kind of sounds like is the situation here. Right. in a situation like this, I’m probably gonna keep their deposit and put the thing back on market. Right. I will say that we don’t stop marketing an apartment until we have a signed lease and security deposit in full. We will continue to market an apartment until that point. But generally speaking, once we have a lease and a security deposit, that’s when we’ll take something off-market. Because at that point we feel pretty secure that that person’s going to move into the unit. Right. We have had a couple situations just like Naven here, where we’ve had tenants that didn’t show up to the move-in and just completely disappeared and couldn’t get ahold of ’em, couldn’t get ahold of him, couldn’t get ahold of him. And eventually we had to just say, all right, well, I guess this person is gone. And we took the security deposit, converted it to essentially lost rent, and just went on and looked for another, looked for another applicant. So I would say to keep your marketing open until you have a situation where you have a signed lease and a security deposit in place, which it sounds like Navin probably did here.

Josh: (22:46)
Yeah. Yeah. I’m gonna say, so they had, is it, does it say they had,

Andrew Schultz: (22:49)
Because they were looking to, they basically decided they couldn’t move in, they signed the lease and now they’re saying can’t move in. It doesn’t actually say whether he collected any funds or not, though.

Josh: (22:58)
That’s what that was my question was anything actually collected?

Andrew Schultz: (23:02)
Yeah, I mean, if nothing was collected, if nothing was collected, you can try to go after them for, again, in the state of New York, you have a duty to mitigate damages, so you would have to go out and find another tenant and blah, blah, blah, blah, blah. But technically, if they sign the lease, then they should be responsible for the rent for the period of time where you had to re-list it. They should be responsible for the utilities and things of that nature. Now, are you ever gonna get that? Probably not. And trying to take that to court. Good luck. Like, yeah. So in a situation like this, if you got the deposit, I would probably convert the deposit over to lost rent and call it, call it done. Just move on. If you find another tenant in that timeframe where they would be paying rent, then you may actually owe money back to the person that decided that they’re not gonna take the unit. That’s gonna be based on timelines and state laws though.

Josh: (23:53)
Yeah. I think I like, I like your suggestion though. Don’t, don’t stop marketing the apartment until you’ve got, you know, you’ve got somebody or the unit until you’ve got somebody physically, physically in there, things are signed, everything is good to go because, you know, I guess pessimistic right? The, the pessimistic view is just to cover, you know, cover you, nothing’s sure until it’s Sure. I guess right. Is, is what you, you need to keep the mindset of, and you just don’t wanna waste time not having that apartment still listed, putting it back up, all that kind of stuff. And, and, you know, that’s, I, I think that’s the best way to go about that.

Andrew Schultz: (24:28)
Yeah. I mean, it’s, it’s frustrating. It’s not something that happens frequently, but every once in a while you will get somebody that goes through that whole process and something will change in their life between the time that they sign a lease and give a deposit and the time that they’re supposed to move in and it just, it doesn’t work anymore. Right. I dunno if I’ve ever told the story on, on the podcast or on any of the AMAs or anything, but that literally happened to me. I signed a lease on a Wednesday and got laid off from my job on a, on on that Friday. Like, tenant screening is a snapshot in time and stuff happens, and like, you never know what’s gonna happen in somebody else’s life after you’re done screening them or anything like that, so. Right. It’s, that’s one thing that we often forget is that tenant screening is a snapshot in time. Just because that person was employed and their life was perfect on Monday doesn’t mean that it’s gonna be the same way on Friday. So that’s, that’s definitely something to keep in mind because it does happen.

Josh: (25:27)
No, no, for sure. That’s, yeah, you don’t, you don’t know what’s gonna happen. That’s, things can change in a, things can change in a day, things can change in an hour.

Andrew Schultz: (25:38)
Yeah. The best part of that was the the guy I was working for at the time knew I was signing a lease on Wednesday and knew he was laying me off on Friday because there were three of us that were laid off. We were the three low man on the totem pole. And he knew like, but he didn’t say anything. I he’s still in the area. He’s still an operator here in Buffalo. And every once in a while I will see him and he, he knows exactly what I think of him.

Josh: (26:01)
Oh yeah. Oh yeah. Do you I know we’ve talked about this question a few times. I know when Carlos has been on, we’ve talked about it here and there, but question on just, just rescreening, I guess tenants, and I know that we, we’ve looked at it and I know we had, you had said that maybe that you, you don’t technically rescreen anybody until Right. I guess until there, until there’s a reason that to bring suspicion. Like there’s no real need for you to be rescreening anybody. But I just, I just wanted to pick your brain again on that, for anybody out there that hasn’t, hasn’t listened to. So

Andrew Schultz: (26:38)
We don’t rescreen like between tendencies, we don’t rescreen. About the only time that I’ll rescreen is if there’s tenancy changes happening. So like, if someone’s moving out, say you have two people living in an apartment, one person’s moving out and wants off the lease, we will rescreen the remaining tenant to make sure that they can still qualify for the apartment on their own. And if they are in a situation where they can’t, then we basically tell ’em, you either need to find a roommate, a co-signer, or a new place to live because you’re not gonna be able to to continue on here. Which looks like nobody wants to do that, but…

Andrew Schultz: (27:11)
It’s, you also don’t want to be in a situation where you’ve rented an apartment to someone and now they can’t afford it either. It’s better to let them move to, from an operational standpoint, you are better off as a landlord letting that person move out before they wind up in a situation where they are underwater because they’re probably not gonna be able to catch up with you and it’s gonna be a messy situation for everybody. Right. So in a situation like that, I would say you’re probably better off, you know, rescreening and making sure that they still qualify and if they don’t, letting them know what their options are and kind of going from there.

Josh: (27:43)
Yeah. And are there any restrictions with the, I’ve, I’ve actually, and I’ve been at Rent Prep for a little bit here, but are there restrictions with just rescreening during mid-lease? I guess can you, can you just re-screen somebody just need to get the, get consent from them to redo it? How would that, I guess, how would that work?

Andrew Schultz: (28:02)
I mean, I guess they would have to fill out a credit or yeah, an application. Again, they’d have to do an application to get you the authorization to run the credit in the background check. I think we modified the language in our application to allow us to go back in and rescreen at will. Okay. and I know we have something in our lease that gives us the authorization to run a credit and background check as well during the course of tenancy.

Josh: (28:28)

Andrew Schultz: (28:29)
That said, I having that in my lease, I’ve never used it. I’ve never, without having somebody go back through and run another background, or I’m sorry, run another application before we run a credit and background. I’ve never just decided to randomly rescreen somebody in the middle of their tenancy. And keep in mind if you pop a credit and background check on somebody, they’re gonna know, like, if they’re monitoring their credit, they’re gonna see that, that pull and they’re gonna say, Hey, what happened here? Why are you out looking at my credit again? You know,

Josh: (28:55)
So Well, yeah, yeah, for sure. The, my question there is is I guess, well, not my question, but I, I think it goes back to what we were talking about. You, you should just have the conversation with the te when you start to understand that, that something might not be right, it is worth probably having the conversation. ’cause Even if you re, even if you go and you rescreen them Mm-Hmm. , it might tell you the same story you had already anticipated. Right. and then it might just create more of a hostile relationship between you and that you and that tenant. And it might, right. It might end up being more of like, it might be more of a hassle to do that and just, you know, maybe just have the conversation with the tenant. Like you said, maybe, maybe if they can’t afford it anymore, it it might be worth it to allow them to break the lease, get out, and then you can fill it with somebody without having, without having all that time and having to go through maybe the eviction process or anything like that.

Andrew Schultz: (29:50)
Well, and it, we had one happen, kind of happen like that recently where we had a tenant that they were gainfully employed when they took the apartment, they lost their job and were kind of burning through some of their savings. And they came to us and they were like, Hey, we would like to terminate our lease and explain the situation. And the writing was on the wall. Like, so I’m a third-party property manager. I’m making decisions on behalf of someone else. Pretty much always our management agreement gives us the ability to make decisions when it comes to starting leases, ending leases, pursuing evictions, all of that. It’s all within our management agreement. So I took a look at the situation and I’m like, this person is going to find themselves in a situation where they can’t pay rent probably sometime in the next 60 to 90 days.

Andrew Schultz: (30:38)
We’re in a good portion of the year. This was during the spring or summer. We are in a position where now is a good time to try to rent the property out. Let’s let this person go and release the apartment. And that’s what we ended up doing. We let them out of their lease, they were able to move back in with family and save some cash. I believe we did charge them the rent on the unit until a new tenant was placed, but it leased up pretty quickly. So we were able to kind of mitigate that for them as much as possible. And it worked out well just because you have a lease. I, my, my thought process on this has changed quite a bit. Pre covid to post covid. I used to be very much the lease is the lease is the lease, and we’re gonna follow that. ’cause That’s the way that it was written. You know, law lease logic, I say it all the time. Yeah. Post covid. I’m using a lot more logic than lease, to be honest with you. Yeah. Like what does the law say? What does logic dictate you should do? Or I’m sorry, what does the law say? What does your lease say? And what does logic dictate that you should do? And sometimes what’s logical is not the same thing as what’s in your lease.

Andrew Schultz: (31:48)
Sometimes it makes more sense to maintain control of the asset and make sure that you have revenue coming through the door, even if that means letting someone out of a lease that you know is not going to be able to pay you in a couple of months. You’re just setting yourself up for headaches at that point. Not for nothing. The eviction timeline in New York State used to be, we could do an entire eviction soup to nuts in 45 to 60 days. Mm-Hmm. , the last one we did was six months. So based on that, like, we’re not playing these games anymore. If somebody wants out of their lease, I’m more inclined to let them out of their lease and move on to the next tenant then to have to go through that process of trying to get the unit back, trying to get control of the unit. Oh yeah. Evictions are never fun. Everybody’s in a really bad mood, you know? Yeah. Nobody’s in a good mental state when you’re moving towards an eviction or when you’re in an eviction and it’s a, it’s bad for everybody. No one wins in that situation. So that’s, that’s kind of where I’m coming from on that, I guess. No, I know that that was very, very long-winded and probably not really answering a question.

Josh: (32:52)
No, I, I think it’s a good point. I, but

Andrew Schultz: (32:55)
I think from an operational standpoint, it’s, I mean, people should know, like, this is how our property management company’s operating that has about 150 doors under management. And this is the reason why, because we are seeing things that have changed in the market pre covid to post covid, and we’re responding to those market changes.

Josh: (33:12)
Yeah. And I think, I think you use, use the lease to protect yourself. You know, in the worst case scenarios, you know, you’re using your lease to, to protect yourself, and then you’re using the logic within the le or you using the logic when you’re looking at the lease based on the situation to, to make a decision on what do you think is best and what’s gonna be less costly for you, you know, less detrimental to maybe the tenant to, and Right. You, you’re making a better decision based off of that. So I, I like that point there. Yeah,

Josh: (33:45)
I like it. But let’s let’s roll on here. Sure. Let’s go to all right, let’s do a form submission question from Tony. My wife and I live in Oregon and have a 67-year-old single male who has been renting a house from us for five years. We have recently noticed a change in his demeanor. A couple who owns a neighboring property has reported several incidents of concern to us that our tenant has been verbally abusive towards them using angry offensive language. Even within their, even with their two elementary school-aged children are present. It has been, it has gotten to the point where they, they feel like they can’t even enjoy the property. This is a first for us. So how do we deal with a situation like this? My fear is that the situation could escalate if we don’t do anything to intervene.

Andrew Schultz: (34:40)
We have a really good, lemme see here. I’m trying to figure out if it’s the most recent episode or if it was the episode prior of the podcast where we talk about resolving tenant disputes and situations exactly like that. Yeah. And this is another one of those, when it’s a tenant versus neighbor type of a dispute type of a situation we will typically try to push that back to the tenant. Let me see here, do some research. Ba ba b baba. I’m gonna have to go back and do some more searching to find that episode. I don’t wanna waste the time while we’re live here. But do,

Josh: (35:20)
Do you think it ever becomes, do you ever think it becomes, when you push it back on the tenant or if that’s the strategy that you use, do you think that that ever becomes, does that ever become an issue down the road? Like, say, the tenant that’s having the issue ends up leaving, maybe they were a good tenant for a while. And then you have somebody else move in, they’re having issues with that existing tenant. And it just becomes a, becomes just like a hostile environment that eventually people, nobody that you rent to wanna live there.

Andrew Schultz: (35:49)
No, I get it. And that’s eventually you’re gonna have to get rid of the problem tenant if they’re on a lease and they’re not doing anything that is Yeah. If they’re on the lease and they’re not doing anything that is justification for termination of the lease. Like if their rent is being paid on time and everything else. Like, it’s tough to tell somebody that we’re just gonna cancel your lease because you’re mean to the neighbors. That’s a very tough thing to pull off and actually get it to get it to fly. So in a situation like that, you know, you, you may be bound to that crappy tenant for the period of the lease term, but you should be absolutely thinking about non renewing that lease or, you know, if there’s any sort of a violation that pops up in that tenant’s lease during their tenancy, pursuing it to the fullest extent to try to get them out of the unit or whatever the case may be.

Andrew Schultz: (36:40)
My goal is to let tenants deal with their own interpersonal issues between one tenant and another, between one tenant and a neighbor. I’m not a relationship psychologist or anything of the sort like you were better off having a direct conversation with the person that you’re having a conflict with 100% of the time than trying to bring in a third party who doesn’t truly understand either side of the story because we’re not living there full-time the way that they are. Mm-Hmm. and asking them to, to weigh in and take a side. And I, generally speaking, don’t wanna be taking sides and tenant disputes. I mean, obviously, there are certain things that it’s pretty clear cut. Someone’s in the right, someone’s in the wrong. But we try to avoid jumping into the middle of tenant disputes whenever possible. And Hmm. If there’s a situation where there’s harm being threatened, like physical violence is being threatened or something like that, we just tell the tenants, listen, you need to contact the police at that point because there’s literally nothing I can do.

Andrew Schultz: (37:35)
Yeah. I’m not gonna walk over there and get in some guy’s face that’s all bent outta shape over whatever guy or girl. Like, isn’t it not not happening? Like, you need to contact the police for that because that’s well beyond what I’m gonna be handling as your property manager. Yeah. That said, I get it. In a situation like this, what, what Tony’s dealing with, where you have someone that is being a constant, like constantly verbal abuse to neighbors and stuff like that, if they’re threatening the neighbors, the neighbors need to be contacting the police department that’s creating a paper trail for you. So eventually you might be able to act on that and remove that bad tenant prior to the end of their lease term. It’s a process like getting an emergency eviction in New York state is you basically, it’s a, it’s an act to Congress.

Andrew Schultz: (38:18)
You basically need the president’s signature in order to get an emergency eviction in New York State, we had one a couple years ago where we literally had a tenant that was dealing drugs off the front balcony of the property. And for the life of us, we could not get an expedited eviction. And I believe it was also during COVID, so the courts were closed or slow or this and that and the other thing. And it just turned into an absolute nightmare scenario. And we ended up losing a couple of good tenants because of the bad tenant that we couldn’t get rid of, and we were getting no support from any of the local law enforcement or anything along those lines. So it was very, very difficult for us to actually pursue that emergency eviction and get it pushed through. And ultimately we ended up going with a nonpayment eviction.

Andrew Schultz: (39:03)
The nonpayment eviction wound up being faster than trying to get an emergency eviction when we literally had somebody slinging bags of dope off the front balcony in plain view of public. So yeah, bad tenants are a real tough situation to find yourself in. It’s one of those things that you never really know what you’re gonna get into until someone moves in and starts living in a space. But they can be real challenges when you get a, when you get a bad tenant, and yeah, it can cost you good tenants. Like it’s, it’s not a, when you’re, when you’re playing by the rules, doing things the way that you’re supposed to, it can take a long time to get rid of bad tenants.

Josh: (39:40)
Yeah. Well I think, I think letting the, i i, letting the neighboring tenants or anybody know that, you know, contact the police, start to get some documentation just on file and, you know, doing that will allow you to at least go back and have a reference point of, you know, here was a physical incident here, was this like, and after it announces something over time, then you actually have all the hard evidence, everything, everything’s saved, documented, and you Right, you can make a decision if it ends up eventually, you know, violating the lease or prompting the police to get involved in and remove that, that person.

Andrew Schultz: (40:16)
Well, and that’s generally, we tell our tenants, listen, make sure that you’re logging your interactions with them. Like if they’re pounding on your door and screaming or something like that, you know, record a video on your cell phone and send it to us. Like, that’s the kind of stuff that helps us to build a case, if you will, when we’re trying to get rid of a bad tenant. And that’s the kind of stuff that when we send that non-renewal notice out and the tenant calls us and says, why am I, why do I have to move while I have 18 noise violations? I have, you know, seven instances of you threatening physical violence against other tenants in the building. Right. There are 12 police reports like it’s

Josh: (40:55)
Yeah. No, I get it.

Andrew Schultz: (40:57)
It sucks. It’s time-consuming. And it, like we tell our, we tell our tenants that are the ones that are calling and complaining about the bad tenant. We understand the situation. We are working on a resolution. We can’t necessarily get into what that resolution is or how long it’s going to take, but the best thing that you can do is to, you know, log your interactions, continue to let us know what’s going on, call the police if necessary, and, and et cetera, et cetera. It’s not fun. It’s one of the no toughest parts of property management and I don’t have a good solution to that. I, maybe somebody else has a better solution than I do. I would certainly love to hear it. Yeah. But you just kind of have to manage those situations as best you can and do what you can to get rid of the bad tenant as quickly as you can.

Josh: (41:41)
For sure.

Andrew Schultz: (41:42)
Some, some landlords will do just month-to-month leases specifically for situations like this where you have a bad tenant, you want them out, and you don’t wanna wait till the end of the lease term or whatever the case may be. A lot of landlords, I’m not gonna say a lot, some landlords will specifically go month-to-month leases just for that reason.

Josh: (42:01)
Yeah, no, I get it. I get it. Do you guys I thought you, I think we’ve asked you that. Do you, you guys don’t do any you don’t do too many month to month or you do none, right?

Andrew Schultz: (42:14)
We have a few month-to-month leases out there. We’ve actually been looking at some options for offering month-to-month lease terms as a more flexible lease term in the market because it seems like that’s something that people are seeking out is more flexibility. And if we, if we go that route, we’re probably going to offer the month-to-month tenancy at a higher rent amount.

Josh: (42:36)
Yeah. That’s what I was to

Andrew Schultz: (42:37)
Offset the, the risk of you moving in the middle of winter and I could have no tenant for two or three months while we’re waiting for So thaw basically. So

Josh: (42:46)
Yeah, I’ve got, I’ve got a friend out in he’s still in an apartment. He’s out in Pennsylvania actually. Mm-Hmm. . And he just changed over from, they were on a year lease resigned with them but changed it to, changed to a month to month to offer them a little bit more flexibility as they’re looking for, they’re looking for a house. So they did that, but the, the premium on the, on the on the unit is now it went up a couple, couple hundred bucks just because it allows them to exit. So. Sure. You know, that makes sense.

Andrew Schultz: (43:18)
We, we’ve done that before too. We actually have a few one-year leases out there written such that the tenant can break their lease with a 60-day notice to us, but only if they’re breaking the lease in a warm weather month. Yeah. So we basically give ’em a six-month window where they can terminate their lease, but if they haven’t purchased a home and they’re getting into the winter months game over, that’s it, you’re now responsible for this lease for those winter months. Yeah. That,

Josh: (43:44)
That’s interesting. I’ve never

Andrew Schultz: (43:46)
Heard of that. The flexibility to look around during the summer months, but also gives us the ability to know that we’re gonna have a tenant through the winter. Right. We’ve done quite a few of those. Those have worked out pretty well over the course of time, I would say. ’cause It gives the tenant the flexibility to know, Hey, I have the ability to go out and start looking. I’m going to be able to break this lease. And then if they find something, obviously they can break using the, the pre-prescribed guidelines and then they know, okay, I didn’t find anything this summer. I’m gonna take myself off the market for a little bit since I know I’m stuck in this lease until the end of winter anyway. Mm-Hmm. . And then they can start searching again in January, February where they’d be able to start breaking their lease in March, April, may, works out pretty well. So that’s, that’s something that we’ve done quite a bit of as well.

Josh: (44:30)
Yeah, I know. And then especially with just, just like the housing market and all that kind of lately, it, that’s, that’s an interesting thing. I feel like, because I mean, I’ve seen more people than ever, at least just, just from my, my friend’s perspective here. They’re, they’re, you know, putting in eight or nine offers, just getting rejected like, like, you know, 20, $30,000 on, on these, on these houses that they’re looking to get. And the timing is a difficult thing when you’re living in, when you’re living in a rental unit. And you’re trying to, you’re trying to be flexible and yeah, maybe you didn’t get the first eight offers that you put in, but wow, you just got that one and maybe you just have to resign your lease, and, and you know, it’s, it’s crazy. It’s, you just, you just don’t know.

Andrew Schultz: (45:15)
Well, and not for nothing. We like seeing tenants graduate to home ownership, like, oh yeah, that’s, that’s cool. That’s big for us. We like to see tenants graduating to home ownership. We don’t wanna see tenants be tenants forever. Obviously, we’re a licensed brokerage, so if a tenant contacts us and says they wanna buy a house, we can certainly help them out with that. Right. And we disclose to the property owner that we’re involved in the process so that they know what’s going on and everything as well. Right. But it’s, it’s really nice to see a tenant be able to kind of climb that ladder, if you will, and buy a home. And there’s some great programs out there for first-time home buyers and now, especially with some of these interest rates starting to come back down, I think the pricing is still gonna suck, but I think that there’s going to be a lot more people coming back into the market when the interest rates come down.

Josh: (45:58)
Yeah. No, I think so. All right. What do we got? 1 47. We got time for a couple more here. Okay. Let’s question from Carlisle. This is a, what is this a form submission question? I know we talked about a little bit on the last segment about this but Carlisle asked burst pipe, who’s liable if the landlord, how do you calculate overage or tradition verse traditional bill? If the, if the tenant, what if the tenant has already left and the bill arrives and they fight additional charges? We didn’t talk exactly about this one, but I think we talked about that bathroom issue. I think there was a tenant in a property on the last segment that we did in January where the, was it the bathroom? Was it the shower had been leaking into the, was it into the wall and it had caused all that damage? Oh

Andrew Schultz: (46:59)
Yeah. Yeah. Yep. I remember that it

Josh: (47:01)
Caused all that damage, but it, it had seemed like it had been leaking for majority of a while, the dependency, and then they had left. And then I think it was a very similar question of just kind of like who’s responsible for the damages and we kind of got into it, but Right. Yeah. This one, this one’s a little different.

Andrew Schultz: (47:18)
Yeah. So I wish there was more info available. Yeah. If landlord, how do you calculate overage versus traditional bill? If the tenant, what if the tenant’s already left when the bill arrives and they fight additional charges

Josh: (47:30)
So it doesn’t look like damage, it doesn’t look like any damage to anything.

Andrew Schultz: (47:33)
It’s like concrete damage. It sounds like it’s just a broken pipe. Right. Maybe it broke in the basement or something and it was just leaking onto a concrete floor or whatever. Yeah. How do you calculate overage versus traditional bill? I think that’s pretty straightforward. I think that you would just look at the previous bill and look at the current bill. You know, you can see for several years back what the average water usage is compared to what the water usage is now. Assuming that this is a, a new burst, newly burst pipe, if you’re dealing with the situation that we were talking about last month’s AMA and discovered a burst pipe as part of that, that pipe has been burst forever. Leo, you’re gonna have to go back who knows how long to find when that pipe actually burst and when the water started being more expensive.

Andrew Schultz: (48:15)
And honestly, like water right here is very expensive. We would notice like, there would be a jump in the usage and there would be a jump in the bill and we would probably notice within one quarter because that’s how often they bill water here. If there was like a situation like that. So either water’s very, very, very inexpensive. Maybe they’re on well water and don’t have a meter, something like that. Yeah, I feel like that there were, I feel like there were opportunities to catch that problem before it turned into a massive repair. Getting back to this though, that’s how I would go about calculating the overage versus the traditional bill. You’re gonna have to figure out when that pipe burst, and then from there, figure out your averages.

Josh: (48:54)
Yeah. It also doesn’t seem, we don’t really have a timeline for this may have been caught within. This may have been caught within a month. I, we don’t really have the timeline here, so, yeah.

Andrew Schultz: (49:04)
Well, and as far as who’s liable for the burst pipe, there’s, we don’t have enough information to say who’s, who’s liable for the burst pipe. There’s a million reasons a pipe could burst. It could have been an old pipe, it could have been frozen, it could have been over-pressurized. Like there are a lot of reasons that a pipe can, can sustain damage. So I don’t know. I don’t know who’s technically responsible for this. I wouldn’t be able to say if the tenant has already left when the bill arrives and they fight additional charges, you’re probably gonna wind up taking it to court at that point. That’s kind of what it sounds like is maybe they’re, they’re already out, you’ve already done the security deposit disposition, and then the water bill came in for the quarter after they’d already left, and now you have a great big water bill.

Andrew Schultz: (49:47)
Yeah. In that situation, you’re probably gonna wind up having to take them to court. They’re already out, you’ve already done whatever security deposit disposition needed to be done. It sounds like they probably had charges and didn’t get a deposit back in the first place. And yeah, they’re absolutely gonna fight additional charges, because guess what? No tenant ever wants to come out of pocket for anything ever. Like that’s just a fact of life. No one is ever going to willingly pony up extra cash on anything ever. Like that’s just where we’re at in society. So you’re probably gonna wind up having to take that to court if you really want to pursue those tenants.

Josh: (50:20)
Right. All right. Let’s just dealing with water here. Let’s go down to the question from Chris. Chris asked, can landlords charge for water and sewer if there are no separate water meters?

Andrew Schultz: (50:36)
This is probably gonna be state-by-state dependent. In some states you can do rubs ratio, utility billing system, I think it’s called. Yeah. And in some states you can’t. So this is one where you’re gonna wanna check your state laws and find out what you can and can’t do. From where I’m sitting, water and sewer are included in all of our units. Even our single-family units, we include the water in the sewer. And the reason that we do that is because water is a lable lable charge here in New York State. So if you don’t pay a water bill, or if your tenant doesn’t pay their water bill, it can become a lien against your house and you could literally leave your house to foreclosure over a water bill. And it’s happened, it happened in Buffalo a few years ago.

Andrew Schultz: (51:21)
There was a big news story about it. It was a mess. So yeah, always keep the water and sewer bills in your name as a landlord and coming to you, rather than going to the tenant, even if they’re responsible for the cost of that service. And then just put it on their tenant ledger and bill ’em out for it. As far as rubs goes, if you’re in a state where you can, where you can do rubs, definitely take a look at it. There’s some information that you can find online. I know BiggerPockets has quite a bit of info on rubs. Mm-Hmm. , it’s not a bad idea. If you’re in a state where you can get away with it and want to go through the time and hassle of splitting out the utility bills. Yeah. It can certainly help improve your, your rate of return if you’re recouping those utility expenses. That’s for sure.

Josh: (52:04)
Yeah. No I was just thinking back, I think I told the story, told the story a couple months ago, but the, the town that I live in had messed up the water bill. And they had shown that I had owed it was a couple hundred bucks from the previous bill, and I was, I was like, whoa, whoa, what’s going on here? Like, I was freaking out, obviously, because ’cause of just water in New York State, and I was like, oh, no. , I’m in trouble here. Right. They then issued, they then issued they issued a, a post or another letter that said that they had messed up the, the calculations and that I was okay. But I found that out. I found that the, there was an issue there before I had received the mail just by being in my towns, in my towns Facebook, Facebook group community. Yeah. Yeah. So they had, everyone was freaking out about it. They were, you know, those are the people that are gonna be talking about it before the town issues. Sure. Issues, any sort of communication on it. So I, I know it’s a, I said it a couple months ago, but always always join your local, any sort of you know, town Facebook group or any sort of forum or stuff like that, you’re gonna, there’s gonna be some valuable info in there. Yeah.

Andrew Schultz: (53:15)
You’ve gotta sift through a lot of garbage, but yes, there’s a lot of, there’s a lot of useful information that comes out of those groups, for sure.

Josh: (53:21)
Yeah. But

Andrew Schultz: (53:22)
Ton of useful information.

Josh: (53:24)
But yeah, I had I had a little scare ’cause I was like, oh man, did I not pay? Did I not pay my water? I, I swear I paid it. I have the receipt here. Yeah. Right. And now saying I owed a different amount than what I even had owed. And they go, Nope, it’s all right. Like, there’s an issue. You know, there was an issue with the billing. Okay.

Andrew Schultz: (53:40)
Yeah. Everything’s

Josh: (53:41)
Okay, Josh. Yeah. They’re not gonna foreclose your, your, your property or

Andrew Schultz: (53:46)
You’d probably get a letter or two in the mail before that anyway.

Josh: (53:49)
Yeah. Yeah. I know. I’m a I’ve only had the, the property for a couple years, so for me as a, as a newer just home, I guess mm-Hmm. Homeowner. It’s, you know, all those, those first times for everything are, are kind of, kind of crazy.

Andrew Schultz: (54:04)
Yeah. That’s not a multi-right. It’s a single.

Josh: (54:06)
It’s a single. Yeah.

Andrew Schultz: (54:08)
Are you house hacking at all or no?

Josh: (54:12)
Little bit here and there. Yeah. Yeah. You know, I’m doing what I, doing what I, what I can, but yeah. Know. Nice. We yeah. Not bad. Not bad. All right. We got, what do we got? 1 56. Can we, now let’s knock out one last, try to do a quick one here. Sure. what do we have? What looks good? How about let’s do this one from, I think it’s pronounced Shike. My tenant stopped paying rent. He says he’ll be leaving shortly, but did not give anything in writing. What are my options? Shall I file for eviction? I know we’re, yes. You don’t know really timeline here when they are in the, we also don’t know which time they’re, yeah,

Andrew Schultz: (55:03)
Yeah. The file for eviction file for eviction is the only answer. I’m glad you picked this one. ’cause This was the one that I was hovering over when you said it.

Andrew Schultz: (55:11)
Yeah, absolutely. Start the eviction process, whatever that looks like in your area. Generally, it’s gonna be a notice to pay rent or quit. In New York State, there’s the five and the 14-day notices, and then you can move on to the actual eviction stuff. But yeah, start that process immediately. Do not wait, get in line, get your process going because all you’re doing by waiting is pushing yourself back further and further and further. Yeah. We have a policy in our office that anyone that is delinquent and has at least one month of rent past due on the 10th of the month, gone to the attorney because the process takes so long.

Josh: (55:48)

Andrew Schultz: (55:49)
You gotta get in line as soon as you can. It’s the only thing that you can do to protect yourself and your asset is to get in line as soon as you can. I don’t know how else to say it. Like that’s one of those things. It sucks when somebody’s in a situation where they are not paying or whatever the case may be. But the only thing you can do as a landlord at that point is to get in line and start the eviction process. You can, you can try the cash for key scenario or whatever. You can do whatever else you want while you’re still in line, you know, waiting to get to court. You can, you can offer somebody a cash for keys prior to court. As a matter of fact, you could go to court and say, I even offered the tenant, you know, X dollars to get out of the apartment and go away. And they wouldn’t do it. Like, yeah. But the only way that you can get that tenant out legally is to start the eviction process. Don’t delay. Get in line now because it takes forever.

Josh: (56:43)
Yes. Yeah. I just wanna, before we end, end here, I just wanna circle back to just the house hacking stuff. I had a, how long were they in there? I had a friend’s a friend’s sister staying in I was renting out one of the rooms to them for I think they were there for four or five months. And then. They found another, another unit. I never had never had any formal lease with this, with this with this tenant, but, they ended up leaving after four or five months. They kind of let me know. The agreement was always to give them, you know, gimme at least one to two months to, for me to decide whether I was gonna fill it or, or right. What I was gonna do with it. But they ended up leaving.

Josh: (57:29)
But I just wanted to bring light to just you. It can be a blessing and a curse to rent to one somebody that you know. And it can be a good thing because you maybe trust that person a little bit more to take care of your property or, you know, take care of your assets. But, you know, there’s always gonna be that personal relationship that, that jumps into. Kind of like we were talking about a little earlier, not, not really, but like, you know, drawing the line between being, being a property manager and a landlord versus them being your friend. . I just wanted to kind of finish, finish off with that and just say, just, just be conscious if you are thinking of ever renting to somebody, you know, like it does come with, it does come with some challenges.

Andrew Schultz: (58:19)
Oh, absolutely. Well, and we actually cover that, or I cover that in the, the house hacking video. I think it’s the last video in the series. I talk about that. The operations video. Yeah. And I very specifically bring up, are you going to be able to have those tough conversations with a close friend or a family member if they don’t give you the rent money on the first of the month? . And if you aren’t, then that’s not a good spot for you to be. You don’t want to be in a house hack scenario.

Josh: (58:44)

Andrew Schultz: (58:45)
At least not with friends and family members. Maybe it’s easier for you to have those conversations with strangers. I don’t know. But it’s one of those things that if you’re going to house hack, you have to understand that you’re living under the same roof as these people too. So you are going to be experiencing every single bit of their emotions. when you tell them, Hey, you didn’t pay rent. I, you need you to leave, or I have to evict you. Like that’s a very real thing and it’s going to, you, you have to deal with that ’cause you’re living there. So yes, we talk about that pretty extensively in the, in-the-house hacking series. I think that’s in the third video.

Andrew Schultz: (59:21)
House hacking is a, especially in today’s day and age, I think house hacking is going to be more and more prevalent. Especially when you start talking about smaller, like in-law Suite apartments or homes and stuff like that. I think that that’s gonna start becoming much more prevalent where you have somebody that maybe they buy a home because it has an in-law suite. They rent it out to a friend for a short period of time before their family member needs it as they’re aging or something like that. Mm-Hmm. big thing down in Florida, actually. They’re building a lot of homes specifically with, in-Law Suites. I was,

Josh: (59:56)
Before that. I was gonna say my I’ve got an uncle down in Kentucky and he yeah, ranch style, ranch style housing that they just basically built an extension off of, off of the house that has basically a small, it’s just a small apartment off of, off of this one story house. Easy for Mm-Hmm. as you get older, easy to know going up and down the stairs, nothing like that. Right. But just, just makes it a lot easier. But I think the plan eventually is to have it is his, yeah, it’s his in-laws. Right. I think we’re actually looking to, looking to move in there. Yeah.

Andrew Schultz: (01:00:30)
Well, and it makes sense because it, think about it, like it’s got a lot of uses. If you’re a parent, you have college-age kids that are going to school locally, you can move them over there. They have their privacy, they have their own home, if you will, but they can still, you know, if they need something, they can come back to mom and dad. Yeah. Then when they move out of the house and get their own place and have moved on, you know, now you can possibly rent it out or whatever the case may be. And then when it’s time for the parents need to be cared for at some point, you know, maybe you’re moving one of the kids into the main house and the parents are moving into the, in-law suite so that they have somebody that’s there to take care of them.

Andrew Schultz: (01:01:08)
And I think that we’re going to see a lot more of this this generational home-sharing and, and things of that nature going forward. Yeah, it’ll be interesting to see how this develops over the next five, 10 years or so, but I think this is gonna become a lot more commonplace. I mean, we’re roughly the same age, and I can tell you that there are a lot of people that I know personally that are living in multi-generational households in some instances due to cost in some instances due to necessity for healthcare reasons. And it’s like, I think that the traditional family unit is gonna start becoming a thing again in a, in a very different It has been,

Josh: (01:01:45)
I guess that, that is kind of funny. I know we’re, we’re over time here, but Yeah. Yeah. I remember my grandparents’ stories of them. Like everyone lived with their parents. Like everybody was in one house, one house, one house, and now everyone’s starting to move out. And then that’ll be interesting to just see the trend and just housing in general and what families do. And, and you know, the shift in that, shift in all that,

Andrew Schultz: (01:02:07)
I think it’s gonna be, I think it’s gonna be interesting to watch over the next five, 10 years. Like I said, I think that you’re gonna see a lot of people in our generation start making choices, thinking about their future, thinking about, about what they’re going to have to do in terms of, okay, are we going to have kids? Are we going to have the responsibilities of taking care of elderly parents? Like what do we need for our own space and things of that nature? It’s gonna be interesting. For sure.

Josh: (01:02:32)
Yeah, for sure.

Andrew Schultz: (01:02:34)
Anyway, we’re over on time here. I don’t think I have anything specific to plug. If you guys haven’t checked out that day in the life of a property manager video that’s up on the YouTube page, that’s a pretty good one. I really enjoyed doing that video. Yeah. obviously the house tax series is coming out. Keep watch for that. What else do we have going on? I just, oh man. I’m gonna do a quick screen share. ,

Josh: (01:03:02)
Let me do it. What do you got?

Andrew Schultz: (01:03:08)
Ashley picked this as the thumbnail

Josh: (01:03:11)
Image’s. What? I, I, I pulled it up and I go, that’s the thumbnail. It’s got you looking down at the camera in there. Oh

Andrew Schultz: (01:03:18)
Man. It’s, it’s .

Josh: (01:03:20)
You might have to have a conversation with Ashley. Oh

Andrew Schultz: (01:03:25)
Man. Oh man. I love it.

Josh: (01:03:26)
I’ve got, yeah, I’ve got, I’ve got nothing to plug, obviously. If you’re watching this on YouTube, head on over to our, our Rent Prep site. You can create an account for free. You can screen as you want. There’s no, no subscription model in play there. You can join our newsletter group, which goes out every Tuesday. We’ve got, you know, three different featured pieces of content that are included in there along with any other updates that we might have. And if you’re on YouTube, yeah. Join and you’re watching this on YouTube or the podcast, join, join the Face, the Rent Prep for Landlords Facebook community. You can just search that right in, right in Facebook. You’ll be able to, I’ll, I’ll be able to accept you in there and you’ll be able to check out all the content that all of our, all of our landlords are, are providing in there. And Andrew’s in there managing as we, as we go here,

Andrew Schultz: (01:04:18)
That’s actually, so that group has like 14,000 people in it, a little over 14,000 people. So it’s a really great group. It’s at And yeah, I’m actually, I’m in that group pretty much every day. Yeah, I’m always posting different crap that I come across. Like I’m always posting weird things that I see out in the field. So it’s, there’s a lot of cool stuff. There’s a lot of great people in that group, A lot of great information for people looking for help with anything landlord and then property management related. So yeah, definitely check that out. But we’ll go ahead and wrap things up here. Josh, thanks for joining me. I know that these are a lot of fun for me. I hope they’re a lot of fun for you as well. Yeah,

Josh: (01:04:56)
Man, they’re awesome.

Andrew Schultz: (01:04:57)
I keep doing these early in the month going forward so that we can make sure that we are able to use these for our podcast as well. So if you guys don’t like the video version, you can listen to the audio-only version on the podcast. It’ll always be the second podcast episode of the month. And if you don’t like the audio version, but like to stare at our faces, hey, you can catch that on the YouTube page or over at Facebook. So yeah, again, Josh, thanks for joining me and we will see you next month.

Josh: (01:05:21)
Yeah, see you next month.

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