Do You Have Tenants? Read on...

I have several houses that I rent.  I've been flipping and renting houses for years now and I have to say I love it!  Yes, it comes with issues and problems from time to time, but what job doesn't have its hazardous parts.

A few years back, I received a phone call from the City's Building Codes office.  I was told that one of my tenants had turned in a complaint about a leaking sink and hole in the tub.  At first I was kind of shocked since I knew nothing about it.  I keep all my properties in top shape and I had received no calls about any leaks.  I hung up the phone and called the tenant immediately.  Since I got no answer, I drove at the property and waited in the car, in 100+ degree temperature for almost 3 hours for the city inspectors.

When we finally went into the house, I was “Oh my God!!!”  It was bad, awful bad!  Yeah, I forgot about being hot and tired when I saw the brown water stain all the way in the hallway.  The floor was completely saturated and swollen.  It had to have been like that for some time now! I walked into the second part of the bathroom to see the tub.  There was a huge crack on the floor of the tub and the tub was wet (they were continuing to use it!) I asked the one present as to what happened, when, where, how, etc.  Everything I asked, she answered with “I don't know!”  Her mother told me later it had happened 2 months ago!  When I asked her why she didn't contact me, she wouldn't answer.  (I guess she was thinking it will go away by itself!!!)

I was quite upset!  If any of you have been thru this before, you know what I'm talking about.  If you have rentals but haven't had any bad experiences YET, I hope you never have one, but it's a really painful feeling.  I treat all my properties with love and respect and when someone mistreats them, I get upset.  I feel like one of my "kids" is hurt.

Now, let me explain a few things: My lease specifically states that the tenants are responsible for the first $100 of any maintenance fee.  I provide them with a list of all contractors that work for me: plumber, electrician, AC, and general repairs and of course they can pick other people if they so choose.  Had she asked for a plumber to fix the problem it would've cost $25 only (the trap in the sink was out of place).  As for the tub, had she told me when it happened and not continue to step on it and tear the entire bottom, it would've cost me $250 + another $250 to put them in a hotel for 2 nights until it was fixed.  A total of $525!  Instead, I'm now looking at $3,500-$4,000 in damages without counting what's not visible to the eye - the decking and floor joyces are drenched, the insulation under the house is soaked, the crawl space is a mud pool, the tub needs to be replaced, the vanity cabinet is so warped from moisture that the base of it is touching the floor, all hardware is missing in action, carpet, padding and decking in the hallway needs to be replaced... and no telling what else we'll find out once we start to work.

Well, one lesson I've learned thru the years in this business is if you give in, you're as good as DEAD! So, count your blessings and keep going! I got to say, it was also a learning experience. It reminded me to go check my properties more often, every month if I can. That way things don't go too long undetected! And always keep very good records of all your conversations and have as much as possible in writing, just in case. Right now I'm looking at the glass half full instead of half empty. I cherish the fact that it happened at the end of her lease so it will be easier to get her out and I can rent that property for a lot more than she was paying. I am an eternal optimist! I believe everything has a positive side. You just have to find it!

Questions to Ask Contractors Before Hiring Them

By C. J. Mackey| Yahoo! Contributor Network

Choosing a contractor can be a difficult and nerve-wracking decision. I've had the opportunity to work with contractors to build my family's dream home and to later add an addition to our home. We learned some tough lessons during the home build, and later had a very successful experience with the addition. Aside from the basics like getting multiple bids and asking for references, my husband and I learned that the questions we asked at the beginning of the process had a tremendous impact on the outcome of the project.

We ultimately got our dream home and addition through a construction process that was painless to our family of five. We still have a great relationship with our addition builder and would happily recommend him to anyone looking for a great home-building experience.

Here are some of the most important questions that we asked (or wished we had asked) when interviewing contractors.

How many projects do you currently work on? It's important to find out how many projects are currently on a contractor's plate. The developer who built our home was working on several projects at once. We would see a lot of progress on our house for a week, and then the crew would disappear for two to three weeks as they rotated to another project.

Have you done similar work?Remember that one size doesn't fit all. Just because someone is an experienced carpenter doesn't mean he's worked with inlaid hardwood floors or elaborate staircases. Make sure that the contractor you choose has references of projects that have some of the same requirements as your job. We had a site supervisor whose experience was almost entirely in the commercial real estate market. While he was knowledgeable about commercial code requirements, he wasn't equally familiar with the process of building a single-family home and couldn't prep us for next steps or making decisions.

Do you plan to subcontract the job? Find out if the contractor has a crew that is on payroll or if some work (such as excavation or roofing) will be subcontracted. If he uses different subcontractors, ask if he has worked with them before and, if so, how many times. He might be a great general contractor, but if he is taking a risk with a subcontractor, so are you.

Do you have a process for dealing with change orders? With a project as big as building your dream home, things are going to change during the development, whether it's because you've changed your mind or worked with a designer who has deviated from the blueprint. Find out up front how the builder deals with change, how she will estimate the cost, and other specifics about her process. We got to the point during our build where we felt every change we discussed had the same $2,500 price tag, no matter how big or small.

How will you minimize the inconvenience to me and my family? When we built an addition on the side of our home, the developer did almost all the work without entering our main house. He coordinated the project such that workers didn't have to break through the walls on the lived-in side of the home until the very end. They even entered the addition through windows so our family wouldn't have to deal with foot traffic or dirt tracking throughout our home.

Would you like me to be available as a reference? Setting an expectation up front that you would be willing to be a reference and to allow the builder to show your home to prospective clients can help smooth the road for your project and have your builder focus on keeping you happy.

How will you handle any issues that arise after the initial build? Even after a closing you have time to discover issues with your home and to notify your builder of any that need to be resolved. Unfortunately, we had 99.5 percent of our house complete at closing, but the last .5 percent required us to threaten a lawsuit to get those final minor tasks done. Discuss early on if the builder will do the work or compensate you for finishing it yourself or hiring someone to address the issue.

As we learned with our addition and home build, the difference between a great building experience or a bad one can be addressed by doing some early research and setting clear expectations before the work begins. 

Bank Fees Add Up!

Willie Sutton, a bank robber with a forty-year criminal career history, famously said that he robbed banks because that's where the money was.  Now a days, we do feel like banks are robbing us and driving up our pocket books with all these hidden fees and charges.  Several people have given me advice and these are a few that stuck with me and now I'm sharing with you!

• Watch minimum balance requirements.  A minimum balance may be reasonable, but if you don't know what that balance is, it will cost you more than you think.

• (The most dreaded) ATM fees.  Try to use only your bank's ATM to avoid extra fees they charge for using another bank's ATM.  These fees do add up quick over the course of the year.  Stay within your bank ATM's network as much as possible.  Don't forget, the bank fees will occur in both sides!  The first charge is from the bank's ATM you are using and the second charge will be your bank charging you for using someone else's ATM machine.

• Debit card charges.  Find out if your bank adds a fee to debit card transactions.  If it doesn't, this can be a good way to make purchases without adding to your debt and get cash without making a separate trip to the bank or without those nasty ATM fees.  Be cautious though, some merchants, especially gas stations, will charge you a surcharge for using your debit card.

• Checks.  You don't have to buy your checks directly from your bank.  They tend to cost more.  Look into third-party check providers for a better deal.  Also, look through your advertising bulk mail.  You'll sometimes see great deals on checks for first-time orders.

Happy Saving!

 

Decluttering Your Finances

With a few changes and some organizational tools, anyone can get a better handle on money management.

As the new year embarks upon us,  it’s a great time to think about what to do differently to declutter your life and get more organized. The benefits aren’t just a cleaner desk or more closet space. According to studies by the Mayo Clinic, amore organized life actually helps individual minimize stress and improve quality of life.

Wondering where to start? One of the greatest sources of clutter and confusion, say the experts, is finances. A desk or kitchen countertop piled high with bank and credit card statements makes it harder to manage your money-or even to know how much is owed and when.

But with a few simple changes and some inexpensive organizational tools it’s easy to get a handle on financial clutter. The first step is obtaining a realistic picture of your spending and borrowing.

1)     CREATE A SIMPLE BUDGET

Do you know how much money is coming in-and going out-each month? Having a firm grasp on that simple equation is the first step to establishing order when it comes to your finances. And with a better handle on expenses and cash flow, it’s easier to stick to a budget-and start the new year off financially fit.

2)    ESTABLISH BILL-PAYING PLAN

Most banks give customers the option of setting up an online bill-paying system, thereby saving you the hassle of writing out a paper check for each creditor. And remember: A bill doesn’t have to be paid the day it arrives. Financial pros say it’s better to schedule a monthly, or even biweekly, block of time to review and pay bills.

3)    KEEP BILL STORAGE SIMPLE

According to the organization experts, all it takes is a 13-pocket accordion file folder to corral a year’s worth of paid bills. Simply label each of the tabs with the name of the month and leave the last one empty for the year’s tax return. Once a bill is paid, file it in the appropriate month along with credit card receipts and bank statements. Not only does this give you a quick way to track payments, but it also provides easy record keeping come tax time.

4)    WHAT TO KEEP

Do you have a box in the back of your closet with canceled checks going back to the 1980s-just in case? Bill statements not needed for taxes can be tossed or shredded as soon as you have confirmation that your payment has been credited to your account.  Receipts for major purchases such as appliances, autos, and furniture should be kept for the life of the item in case you need to file an insurance claim. Tax experts recommend keeping tax returns for seven years. Decluttering your finances will not only save your time and stress-it can save you money as well.

           

THAT’S A KEEPER

How long to hold documents?

One Year: Unless needed for tax purposes, then keep for seven years. Paycheck stubs, utility bills, canceled checks, credit card receipts, bank statements.

Seven Years: Brokerage statements, income tax returns, receipts, cancelled checks and other documents that support income or deductions on tax return, purchase confirmations and 1099’s.

Hold While Active: Contracts, insurance documents, stock certificates, property records, warranties, stock records, records of pensions and retirement plans, property tax records and disputed bills, home improvement records

Keep Forever: Life insurance policies, wills, mortgage records