Can you do us a solid?

Our podcast has grown over the years because of listeners like yourself. One way you can help us grow further is by leaving us a review of our podcast. It will only take a minute and you can find detailed instructions by clicking here.

Resources Mentioned on this Episode:

Show Transcription:

Andrew Schultz: (00:00)
Hey everyone. Welcome back to another episode of the Rent Prep for Landlords podcast. This is episode number 357, and I’m your host, Andrew Schultz. On today’s episode, we’re going to be talking about co-signers for college student rentals, landlords obligations for tenants’ mail after move out and what to look for in a property manager. We’ll get to all that right after this.

Voice Over: (00:23)
Welcome to the Rent Prep for Landlords podcast. Now your host, Andrew Schultz.

Andrew Schultz: (00:28)
Before we jump into today’s episode, don’t forget to check out the Rent Prep for Landlords Facebook group. It’s a great free resource for you to network with housing providers from around the country. And if you have a question or a situation that you’ve never dealt with with over 12,300 members, chances are someone in the group has been there before and can lend a helping hand if you haven’t checked it out yet, do it today. Over at facebook.com/groups/rentprep. Don’t forget to mention the podcast when answering the questions. So we know how you found us.

Voice Over: (01:00)
Forum quorum, where we scour the internet for ridiculous posts from landlords and tenants.

Andrew Schultz: (01:08)
This week’s forum quorum comes to us via the landlord subreddit. We’re going to go ahead and take a look at this one. It’s all about co-signers for college students. Let’s take a look here. It’s hard to find information, but if one is requiring co-signers AKA parents for college students, does it require a notary, or does a co-signer or Dunham or agreement suffice and hold the parents legally responsible. And again, this one comes from the landlord subreddit. So here in our office, over at Owned Buffalo, we use a co-signer addendum that we attach to the original lease. We used to require that it be signed in the presence of a notary. If it wasn’t signed in front of our staff, where we could verify somebody’s ID, but we’ve since moved to a digital platform for most of our signatures. And we feel comfortable enough with that, that we no longer require the notary.

Andrew Schultz: (01:55)
If somebody is doing paperwork like physical paperwork, like they want to physically sign the lease and have somebody sign the a Dunham at that point, we would require it to be notarized because more than likely it’s not going to be signed in our presence. The only time that we would not require it to be notarized would be is if somebody is signing that in the presence of somebody from our office, and we can verify who they are with their ID and things of that nature. Otherwise, we would require a notary. I don’t know of any requirement, at least here in the state of New York with regards to having leases notarized or having any sort of a gender or anything like that. Notarized. Again, I’m not an attorney you’re going to want to speak to yours, but at least as far as my knowledge goes, I don’t know of any sort of requirement here in New York for that I will mention that different states definitely have different laws.

Andrew Schultz: (02:37)
Some states do require leases to be notarized, or if a lease is going to be over a one-year term of length or something like that, then there may be a notarization requirement. So you’re definitely gonna want to check your state laws and see if you have any like weird requirements that just don’t necessarily happen in other parts of the country. It’s always good to have a good handle on your local and state laws so that, you know, what’s going on. Now, I know that somebody is going to start screaming about using digital platforms and somebody could just log into their co-signers’ email address and sign up without them ever knowing. Yeah, that is a legitimate concern. I’m going to call it a semi-legitimate concern because you should be screening your co-signer to the same level that you screen your tenant. As a matter of fact, you’re going to want a little bit more out of your co-signer than what you’re going to want out of your tenant.

Andrew Schultz: (03:21)
And if you’re going through that full screening process, it’s not as simple as somebody just logging into the email account of their co-signer and, you know, agreeing and signing the document. They will have had to have faked an entire rental application at that point. And if they were able to fake an entire rental application and you didn’t notice that they were faking the entire rental application, they’re either very, very convincing, or you really have to sharpen up some of your criteria. So if you’re going through this process and you’re thinking about a co-signer, you definitely need to be in the mindset of screening that co-signer right alongside of your tenant. We use the same criteria for our co-signers that we do for our tenants in terms of creditworthiness you know, reference checks, things of that nature. The one thing that does differ is we require additional amount of income.

Andrew Schultz: (04:07)
We require four and a half times the rent net income versus three times the rent net income on just a standard tenant. And the reason we do that is because we want the co-signer to be financially responsible in the event that the tenant defaults on the lease, we want that co-signer to be able to step in and pay that rent. So we want to make sure that they have enough income to cover not only their own expenses, but this rental expense in the event that it comes to that obviously we all hope that it never comes to that, but it’s super, super important to make sure that if you’re going to accept a co-signer, that they do have an income worthiness, to be able to actually step up to the plate, if the, if the time comes where they need to do that, otherwise the co-signer is not worth the co-signer agreement that it’s written on the lease isn’t worth the agreement it’s written on.

Andrew Schultz: (04:52)
So it’s, it’s one of those things where yes, you’re going to have to put in a little bit more work if you’re going to accept a co-signer, but if that’s what it takes to get a tenant into a unit that might be the route that you have to go. So in the past, we actually used to manage a ton of student rentals near one of the local colleges. And I can tell you that every single one of our college students had to have a co-signer it didn’t really matter to us if they were undergrad or graduate, we required co-signers of all of them. Actually, I shouldn’t say that on the grad students, if the grad students had the ability to prop themselves up with either income from loans or if they were working some sort of a paid internship and could prove income that way they could, they could avoid the co-signer.

Andrew Schultz: (05:30)
But definitely, all of our undergrads were required to have a co-signer in place. The one nice thing about a co-signer, especially when you’re dealing with undergrad rentals is, Hey, if there’s a bunch of damages, you’ve at least got somebody that you can try to come back to and say, you know, your son or daughter caused all this damage above and beyond the security deposit. Let’s, let’s see what we can do to resolve this. So it’s, it’s always interesting when you’re dealing with college student rentals, especially when you have, you know, a multiple home that you have unrelated college students living in or something along those lines, the management headaches can get very, very tricky, very, very quickly. My recommendation is always make sure your paperwork is in line, especially when it comes to your leases. And especially when it comes to your guarantor agreements, because eventually on a long enough timeline, you are going to wind up in court with one of these college students over something. It could be something unpaid rent could be damages, whatever the case may be, you know, just like any other tenant on a long enough timeline, you will wind up in court. So make sure that you have your paperwork tightened up so that you know that you’re going to be able to go after that tenant. And that co-signer that guarantor when the time comes

Voice Over: (06:37)
Water cooler wisdom expert advice from real estate pros.

Andrew Schultz: (06:45)
We have two really good water cooler wisdoms for you this week. We’re going to go ahead and take a look at this first one. This comes to us via the Rent Prep for Landlords Facebook group. Let’s go ahead and jump right in tenant recently vacated a month early, and I kept their security deposit to cover the last month’s rent. Now they keep ordering me around to handle their mail. I told them I put return to sender on the envelopes and they are not happy with this and are claiming that the home is apparently still leased to them. How should I respond? And legally, what are my obligations in this matter? They have forwarded with the post office, however, it’s still coming here. So I guess I’ll start this one off by saying that mail is federally regulated, which means don’t screw around with it. There are massive, massive fines associated with, you know, mail crimes.

Andrew Schultz: (07:32)
It’s one of those things that you’re better off letting the tenant deal with this situation between them and the post office and just staying out of it completely. But we’ll get more into that in a second. Keep in mind that male crimes are like one of those things that I think back to the mobster areas, there were a lot of guys that were put away on mail fraud and wire fraud charges because they cross state lines, which meant that they could make the cases federal instead of just a state case or a local case or something like that. The post office literally has an entire division of inspectors and postal police that you know, are dedicated to investigating all sorts of issues that go along with the mail. Mail is federally regulated. Don’t screw around with it. You’ll be thankful that you didn’t.

Andrew Schultz: (08:13)
So getting past that, I will say that the tenant is responsible for forwarding their mail after they leave the apartment, not the landlord. This is between them and the postal service. If you receive mail for them at the property, you can mark it RTS or return to sender, drop it in any blue post office box, a USP S box. Or if you have a mailbox at the property with a flag on it, just put the flag up, throw the stuff back in there. And the postal carrier will pick it up and take it on their next pass. Through the, through the area. You can also put a tag on the mailbox indicating that the unit is vacant and that no mail should be delivered. Sometimes you’ll still get some stuff that gets delivered. Even if you do have a vacant tag, usually it’s, you know, the garbage coupons and stuff like that, but they shouldn’t be delivering the actual tenants’ mail.

Andrew Schultz: (09:00)
At that point. Once they know that it’s vacant, you could also call the local post office and explain it and they’ll let the carrier know so that the carrier knows not to drop mail there. You know you do get substitute carriers and stuff like that. They may not know that. So you may still wind up with the, you know, occasional mail piece or whatever, but ultimately it’s the tenant’s responsibility to take care of all of this. You have a few options here, and none of them involve you dealing with a tenants mail directly, which keeps you out of it. For the most part, the tenant needs to contact the post office and deal with this on their own. The fact that the tenant seems to think that you’re responsible for their mail leads me to believe that you’re probably fairly lucky that this tenant left a month early.

Andrew Schultz: (09:38)
I hope that this one works out for you. Good luck with your next tenant and good luck with this whole mail situation. Our second water-cooler wisdom also comes to us via the Rent Prep for Landlord’s Facebook group. This one is on choosing a new property manager. We’re going to go ahead and jump right in. I’m seeking some advice. I interviewed two different property managers. They both seem equally great. However, one manages properties right next door to mine and directly behind it. I thought this might not work in my favor or create an issue. For example, we were already having an issue with regards to the fence. Would it be better to have separate representation? The big pro to both property managers is that they seem to have teams in place. What are your thoughts on this pertaining to this issue? Not on the opinion of whether or not I should hire a property manager.

Andrew Schultz: (10:22)
Well, I’m going to give you my opinion anyway, because I am a property manager and I think, yes, you should hire a property manager, but I might be a little bit biased on that. So we’ll go ahead and jump into this a little bit deeper here. So I can tell you that as your property manager, I’m probably not going to be fighting a battle over a fence. That’s going to be a job for an attorney. I’ll gladly work with your attorney. I’ll even recommend one. But I can’t fix a fence dispute. That’s way outside the scope of the job of a property manager. You need to have an attorney and an updated survey, and it’s, it’s, that’s going to be a totally different battle. That’s outside the scope of property management. Your property manager is not responsible for dealing with a fence dispute that is, you know, just it’s outside the scope of the job, essentially, in all reality, having a property manager with multiple properties in the same area is a good thing.

Andrew Schultz: (11:09)
It means that your property is likely going to be seen more frequently, even if it’s just on a drive-by basis because the staff is going to be at other properties in the same area as yours. So that’s always a nice thing. They might be showing an apartment in the building next door. They might be fixing a toilet in the building behind you, but the chances are that if they’re in that area, you know if you’re going to one property and there’s another one right next door, you’re probably at least going to take a glance at it to make sure that everything is okay. So that’s actually a positive for you. And that’s actually a benefit to the other owners in the area as well. It’s actually better when a company has more property in a certain area because it helps them to be able to offer a higher level of customer service, essentially, simply due to proximity.

Andrew Schultz: (11:50)
You know, when you’re, when you’re near a property more, it’s a lot easier to manage that property. And I think that that’s something that everybody would agree with. It does sound like you spent some time interviewing property managers, which is awesome. You would be surprised at the number of people that will just make a couple of phone calls and then pick whoever sounds nice. They don’t really do a whole lot of research into property management or how to select a good manager. What makes a bad manager, things of that nature. I would say that some of the most important questions that you can ask when selecting a property manager would be with regards to licensure with B re in regards to fee structure, and then would be in regards to seeing some of their documents such as their lease, their property management agreement and a sample monthly report, because you’re going to want to know what you’re going to be experiencing on a monthly basis when they send you that report.

Andrew Schultz: (12:39)
And, you know you want to make sure you can read it and understand it because there are a lot of property managers that their reporting sucks. And you get to a point where you’re like, I don’t even know what the financials of this property are anymore because the reporting is so bad that you can’t even tell what’s going on. I’ve definitely seen some property management companies with reports that are just plain garbage. There’s no other way of describing it. The reporting just doesn’t make sense. That being said, I think that it’s important to understand what it is that you’re signing. So I would say you definitely want to review that PMA, that property management agreement in detail, possibly even have your attorney take a look at it because that is a leather document that you’re going to be legally bound to. And you’re going to want to know what your tenants are signing.

Andrew Schultz: (13:20)
So you’re going to want to see a copy of their lease agreements. You know, for us, our lease agreement is I think 13 pages here in New York. You know, some people operate on like a three-page lease that doesn’t cover anything. So it really, you know, depends. You want to make sure that the documents that your property manager is using or are using, you want to make sure that those documents are acceptable to you because they’re going to essentially be running your investment for you. They’re going to be running your investment on your behalf. You want to make sure that the documents that they’re using, aren’t putting you at some sort of risk backing up a little bit fee structure is another thing I would say that you want to have a really, really good handle on, and all of the fees should be outlined in that property management agreement.

Andrew Schultz: (14:04)
So you’re going to want to review that, to make sure that all of the possible fees and things like that are in there. You don’t want to sign an agreement thinking that you’re only going to be paying out a percentage of rents every month and then find out that they’re going to be up charging you on maintenance jobs or up charging you on whatever, whatever the case may be, a tenant placement fee. You want to know what all the fee structure is before you sign. And before you jump into a property management agreement, because again, you’re going to be bound to that contract. So make sure that whatever the fee structure is that it’s clearly outlined and that it is in the property management agreement so that you know what you’re going to be charged, backing up even a little bit further. I mentioned the licensure most states at this point do require some sort of licensure in order to do property management here in the state of New York, you need to be a licensed real estate brokerage or you need to be a licensed real estate salesperson operating under the auspices of a licensed brokerage that knows that you were doing property management.

Andrew Schultz: (15:01)
Essentially the brokerage is responsible for the property management because the contract is going to be between the brokerage and the property owner, not the individual agent and the property owner. So that’s something to keep in mind as well is understanding what licensure is required, but I’m going to add insurance on there as well. Licenses and insurances are required in order to make sure that your property manager is operating from a legal standpoint. I do actually have a little guide called the 10 questions you have to ask before hiring a property manager. If you’re interested in getting a copy of that and seeing the 10 questions that we recommend that people ask when they’re interviewing their property managers, you can head on over to whatsdrewupto.com, go ahead and send me a message from over there. And I will ensure that you get a copy of that.

Andrew Schultz: (15:45)
It’s a five or six-page PDF. It’s pretty straightforward to probably takes you 10 minutes to read, but it’ll definitely improve your interview process. When you’re going to select a property manager. Are you wondering what your next step should be for a tenant that not only stopped paying rent, but packed up and left your rental in the middle of the night without saying anything Rent Prep has you covered find out how to proceed by reading our latest post over at rentprep.com slash blog today? So that pretty much wraps things up for this week’s episode of the Rent Prep for Landlords podcast. Thank you all so much for listening. We truly do appreciate it. Our goal with the podcast is to help as many people as possible make educated decisions when it comes to real estate, and you can help us to reach our goal. If you heard anything in this week’s episode or any other episode that will help someone, you know, please do us a favor and share it with them.

Andrew Schultz: (16:33)
If you’re looking to get in contact with me, I can be reached over at whatsdrewupto.com from there, you’ll find links to everything going on with me over at Own Buffalo, as well as other projects that we’re working on. In addition to the Rent Prep for Landlords podcast, I also host a weekly show called ask a property manager. You’ll find a link to my YouTube page over at whatsdrewupto.com. And from there you can access the growing catalog of 75 plus episodes. Take a look and don’t forget to subscribe. If you’re looking for top-tier tenant screening services, head on over to rentprep.com, there are multiple products to choose from including a tenant-paid option. And if you’re over 50 doors, ask about the enterprise-level programs and pricing. I’ve been an enterprise user of Rent Prep for years now, and it’s definitely changed the way that we screen our tenants. Check that out today, over at rentprep.com. Again, thank you all so much for listening. We’ll be back in a couple of weeks with an all-new episode that you won’t want to miss until then I’m Andrew Schultz with ownbuffalo.com for rentprep.com and we’ll talk to you soon.

Tips For Hiring A Property Manager (Podcast #357)

Can you do us a solid?

Resources Mentioned on this Episode:

Show Transcription: