Saturday, March 9, 2019

BENEFITS & DRAWBACKS OF LLCS & TRUSTS FOR ASSET PROTECTION

Real-Estate & Business Asset Protection Options






Hole-E- Cow! When it comes to Structuring your Business or Real Estate for asset protection, there are a LOT of things to consider. It's enough to overwhelm anyone! I've searched and searched.... and searched... and could not find an article or post that had all of the benefits and drawbacks of LLCs vs. Trusts for asset protection. So I spent hours, days, and weeks sifting through all of the haystacks to find you the needles so that you don't have to. I've also spoken to several attorneys and CPAs... While I learned a lot, I've actually taught them a thing or two- I was shocked that I knew that much. Not to mention, there must be a lot to this if I'm teaching them something.

When considering the various options, you need to ask yourself the following:
What happens from a tax, legal, insurance, and administrative standpoint for each option?

I would recommend that you get a notebook out and take notes on what applies to you under each option, then list each of the 4 things from above underneath each option so that you can come up with the best solution for your assets and/or business. 

By the way, this is not a comprehensive list. I found a lot of the needles in those haystacks, but there may be a couple still out there somewhere. 





BENEFITS OF LLC: 

  • Protects Personal Assets: Should the property be subject to a lawsuit, the LLC can only be sued within the constraints of what the LLC owns, and not beyond that. That means your personal assets will not be affected.
  • Corporate Shield Protection: Another way your assets will be protected from personal liability is if your LLC is registered in a state with charging order protection. In other words, if a creditor comes after you personally, they are only able to get a charging order against your interest in the company, but cannot touch the assets of the LLC. Best Charging Order Protection is typically offered through the states of Wyoming, Delaware, Nevada, New Mexico, and Ohio- YES OHIO (people are still catching up to this one).  Here's a list of Charging Order Statutes in all 50 States.
  • Medicaid Planning Tool: An LLC can be used for Medicaid Planning. When a property is an income producing property, medicaid will not count it as as a personal asset for medicaid purposes, as long as it makes 6% of the total value of the property annually. According to federal law, any real or personal property that is essential to an applicant’s self-support, regardless of value or rate of return, is excluded. That could include farms, rental properties, and other real estate investments that generate income. The catch is that the property must generate at least six percent of its value annually to qualify for the exclusion. 
  • No Personal Risk: Owners have no personal risk above and beyond their interest in the company (as long as you have your LLC or parent LLC registered in a state with charging order protection).
  • Tax Benefits- write offs.
  • Flexible Taxation: You can choose to be taxed as a Partnership, S-Corp, or C-corp. 
  • Overall Flexibility: You can change the terms or organization at any time.
  • Ability to Pass Ownership Tax Free: A parent can allocate some of the “asset value” and some of the “income” to the adult child as a co-member owner. LLC owners can also easily transfer their ownership in real estate holdings by proactively gifting the company's membership interests to their heirs each year. Over time, it is entirely possible to effectively pass ownership of real estate owned by an LLC to loved ones without ever having to formally execute and record a new deed. This enables property owners to avoid transfer and recording taxes and fees, which can be substantial in many states.
  • Foreign Ownership: Unlike an S corporation, foreign ownership and investment in U.S. real estate is possible through an LLC.

  • Anonymity: Although you can look up corporations online in many states, and find out who the owners are, it’s a step most people still don’t take. At a community level, LLCs tend to offer more anonymity than realty trusts, unless you advertise the LLC. You can also register your LLC anonymously, and your personal information will be kept private. (However, your LLC has to be registered in a state that allows anonymous LLCs.) There is an exception to this rule, which is if a court orders you to reveal your assets. However, this seldomly happens because of the upfront cost for attorneys and court fees.

  • Double Layer of Protection: Having an LLC as a double layer of protection is a smart way to make sure no one can come after your home or other assets, should your insurance fail to cover you.
  • Inexpensive: It normally cost anywhere from $50-$200 to register your LLC. Only a few states charge $500-$800.

  • For details on LLCs, including how members are taxed, state rules on LLC protection for members' personal debt and asset protection, and more, see Nolo's LLCs section. Nolo also offers a comprehensive online LLC package to form an LLC.




DRAWBACKS OF LLC: 




  • Certain Legal Fees: As a company, you must have an attorney represent you. You cannot represent yourself in court.

  • Property Taxes: Property taxes may go up if you don't already have a property registered as a rental.

  • Borrowing Challenges: Harder to finance a business with no established credit, as opposed to a personal loan, because there's usually more history on a person's personal credit. Interest rates are usually higher for businesses as well.

  • Extra Paperwork: If you have an LLC, you have to get a Tax ID, file Tax Return, create an Operating Agreement, follow LLC compliance regulations, and other paperwork. You may also have to pay money in state fees every year (depending on your state-some don't have annual state fees).

  • Multiple LLCs Can Get Expensive: If you have a lot of properties, with all of them in separate LLCS, you could end up paying thousands in annual filing fees- if your state makes you pay them annually. Fees are typically in the $100 range, but some states can charge upwards of $500 or more. If you want to use multiple LLCs, but the fees are exorbitant, you can section them off into categories of properties, such as section 8 properties, single families, or section by area, etc. Or you could do 3-6 properties per LLC. This way you don’t have to pay so much in LLC annual fees. Here’s a list of LLC Annual fees by State

  • Leaves Your Interest Open to Creditors: LLC can leave a portion of your company open to potential creditors-- basically, your interest in the LLC is up for grabs if you have a judgement against you personally, but not the asset or any other member’s interest within the LLC (As long as you are registered in a state with charging order protection).

  • May Cost More to Insure: If you transfer a property into an LLC, some insurance companies will charge more because of it being considered a business. However, in my experience, insurance did not go any higher, and the only way the rates would have went up is if it had been years after purchasing the original policy, which means, they'd have to write a new one, and because of the cost to rebuild goes up each year, the policy rate would increase.








BENEFITS OF REVOCABLE TRUST: 


  • Self-Representation in Court: It’s not required to have an attorney represent you in court. You can represent yourself.

  • Anonymity: Trust would be listed instead of your personal name, however, that doesn't make it safeguarded against creditors. It merely just makes it harder for people to find out who owns the asset.

  • Flexibility: You can change it later. Also, if you need to refinance, you can take the house out of the trust to refi, then put it back in.
  • Helps Keep Everyone Honest: If there will be several owners of an investment property then a trust is very useful to document the relationships and ownership interests of all the owners, in a consolidated way.
  • Estate planning: For those looking to ensure that their investment property can avoid death taxes, many will transfer the investment property to their heirs by way of a real estate trust.
  • Avoid Probate
  • Privacy: A revocable trust can protect the privacy of your property and beneficiaries when you die as well. Because it's not subject to probate, your trust agreement remains a private document. It doesn't become a public record for all the world to see. Your assets and who you've decided to leave your estate to will remain a private family matter, as opposed to a last will and testament that has been admitted for probate. It becomes a public record that anyone can see and read as soon as it's submitted to the court.


DRAWBACKS OF REVOCABLE TRUST


  • Asset not protected - Property is still considered yours as far as estate taxes and creditors are concerned.
  • Anonymity is not absolute: It's anonymous until the court makes you reveal your assets.
  • Possible Future Fees: Revocable trusts will also have modifications they need to make in the future. These possibilities will require additional legal fees to manage down the road, on top of the original fees.
  • Expensive: Costs anywhere from $1000 to $2,500.




BENEFITS OF (IR)REVOCABLE TRUST:

  • Anonymity: Property goes into the name of the trust
  • Protection: Impenetrable- nobody can get to the asset(s). The only caveat is the Medicaid 5 yr lookback.
  • Avoid Probate
  • Privacy: Can protect the privacy of your property and beneficiaries when you die like the revocable trust.
  • Estate tax advantages



DRAWBACKS OF IRREVOCABLE TRUST:




  • Medicaid 5 yr lookback: Medicaid will look very hard at the trust to look for any way that the money can come back (or be forced to come back) to a Medicaid applicant. If Medicaid finds any opening, the trust will lose its protection against long term care costs.

  • Unchangeable: You can’t change it later.

  • Loans & Financing more Difficult: Not easy to refinance or get a bank loan against it

  • Lack of Control: Once it's written, signed, and sealed, you give up control of the property to a trustee.

  • Possible Trustworthiness Issues: You must have a trustee that you, infact, trust.

  • Expensive: Costs anywhere from $1000 to $2,500

  • Complex: There's a lot of stipulations, rules, and what-if's, and if they're not all included, you could be up the creek without a paddle. 

  • May Not Be Done Correctly: Attorneys may not do it right, and 10yrs later when it comes time to put it to use, it might night work as you had hoped... and the attorney who created it for you is long gone, with the 2 grand you paid them. 

  • Tax Returns: Trust must file tax returns and value assets

  • No Tax Advantages: No tax advantages other than estate taxes. They are a separate “person” for tax purposes, and the income that the trust earns must be reported and the resulting tax paid. Non-grantor trusts (and this should be a non-grantor trust) must pay at the top income tax bracket whether the trust has high income or low income.





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FREE & LOW COST LEGAL CONSULTATION & BUSINESS CONSULTATION

6 Resources for Free & Inexpensive Legal Advice & Business Mentoring




(Photo Credit: Rawpixel- Unsplash)

If you aren't blessed enough to be surrounded by wealthy business gurus, CPAs, and Attorneys, you’re probably lost when it comes to business and legal matters like I was.

You may have searched for free legal help online only to be bombarded by attorneys offering a free short 15-30 minute consultation.... then if you do end up getting a free consult, they typically leave you more confused than when you started.

I had an attorney offer to consult with me for $175, just for 30 minutes! Are you friggin kidding me?? I know they are providing a service with an area of expertise, but it's downright wrong to take advantage of people like that. People should know the laws the govern them, and they shouldn't have to pay an exorbitant fees just to get some info about it. Come on America! We're better than this!
In today’s day and age, the amount of attorneys in the US are at an all-time high, and so are lawsuits. So of course as a business & individual, you need protection… and this kind of resource is not easily or cheaply obtained.

So, to make your life easier, I've listed some outstanding resources for you to get business consultation and free and low cost legal services

(Photo Credit: Rawpixel- Unsplash)

FREE & LOW COST LEGAL SERVICES

AVVO: Avvo is 100% free. On this site, you can post a question, (as many questions as you want) but only one question at a time. Once your question is posted, 2-3 attorneys, with that particularly area of expertise, will answer your question in 24-28 hours. I've had questions answered on a holiday, so that was pretty impressive. The point of the site is for you to get some quick legal questions answered, while the attorneys can potentially acquisition clients and drum up some business. 

However, there are some drawbacks to this site. One drawback is that the attorneys answers aren't always very detailed, and some of their answers can be a bit condescending, at times. But, the positive in this is that at least you know it's real humans answering your questions. Another thing I've experienced is that their answers are typically not very detailed, and they almost ALWAYS circle back around to telling you to find and attorney to talk to. It's like they scratch the surface, but don't seem to get down into the meat and potatoes, because they're obviously in this to get business out of it. Bottom line, it's good to use the site when you have a quick legal question, but not if you have a more complex question that involves several facets. 


LEGAL SHIELD: They are a very low cost legal service, and they're the highest rated--and for a good reason. I've personally used both the business and personal plans, and they absolutely rock on both! 

The way they operate is by being the go-between with you and a standard attorney office in your local area, whom Legal Shield has contracted with. There is a cost, but it's peanuts compared to the attorney in the beginning of this article. Basically, you pay a monthly membership fee: $25 for personal plan or $40 for the business plan. With these plans you get unlimited phone consultations. They will also write letters and make phone calls on your behalf. They also offer representation in court, but only if you're sued in a civil matter. Another great resource they have is quite a few common legal documents, such as Lease, Articles of Organization, Non-disclosure Agreement, Independent Contractor agreement, etc.  They don't represent you with criminal matters, but they can advise you on what you should do, which makes this service an invaluable tool in both the personal and business world! 

They have a guarantee that they'll have an attorney call you back within 4 business hours, but most of the time, I've had attorneys call back within 30 minutes to an hour. They've even called me back after business hours. 

(If you're a small business registered with the state they also have a GoSmallBiz plan that you can add on for an additional $15 per month. If you're a small business not registered with the state, you can add on GoSmallBiz for $10 per month, when you add it to a personal plan. GoSmallBiz is an excellent resource that provides guidance to help any business get on the right track. Details on the GoSmallBiz plan below.)

I've been trying to find the flaw or catch with this company, but I haven't been able to find one. The small amount of customer complaints that they do have typically comes from people who don't have a full understanding of the type of services they offer and the limitations to the service. You're not going to get a full service attorney for $25- $40 bucks a month. But the consultations and resources alone are worth much more than the price. I should also let you know that I'm not being compensated for referrals. I'm just recommending this service because I truly believe in it. It has gotten me through a many of sleepless nights.

If you want to see the law firms they use, you can find their contracted law firm in your area here. 


ROCKET LAWYER: Rocket Lawyer can be a good resource when it comes to getting legal documents and forms. They have over 40k legal forms. That is certainly their strength and specialty. They also have legal consultations, but it's handled a bit differently than with Legal Shield. With Rocket Lawyer, a member can either ask a simple legal question on the online forum, or if it's a more complex issue, they can get a free 30 minute consultation with an attorney. However, you're limited to only 1 call per legal matter. If you need any further consultation beyond that, you'll have to hire their attorney, but you get a 40% discount off their rates. 

LEGALZOOM: You'll see a lot of different sites recommending LegalZoom as a low-cost alternative to hiring attorneys, probably because they receive a commission for the referral. However I say NO! Don't do it! I have not had any personal experience with this service. However, I almost did use their service, but saw that they had an avg of 1 star review on the consumer affairs website.  Common complaints were that they overcharge credit cards, mess up the legal paperwork (huge deal, since it's whole purpose is to protect you), and it takes forever just to get someone on the phone or to get the services actually completed. The other downside is that they make you pay for 6 months in advance, whereas other sites like Rocket Lawyer and LegalShield charge monthly, and you can cancel at anytime. Thank God we did not use Legalzoom, and you shouldn't either!


(Photo Credit: Rawpixel- Unsplash)

FREE & LOW COST BUSINESS CONSULTATION


BIGGER POCKETS: This is mostly an online forum for real estate investing. However, there is a lot of business related things covered, since real estate is a business. You can sign up for a free account and start discussions and ask questions on a number of business related topics. You'll also find several tools and resources on this site. 


QUORA: Quora is an online forum where you can ask ANY question at all. The have tons of categories to choose from. So you can ask a question that specifically applies to your business, and you'll get loads of answers from the community. Most of the members want nothing other than the credit of knowing they had the top answer.  It's kind of like when you're in school, and the teacher asks the class a question, and you excitedly raise your hand and wave it around saying: "I know! I know!" 


GO SMALL BIZ: Have you ever felt alone in trying to get your business off the ground, and wished you had a business mentor who could help you get going on the right track? That's what you'll find with this service. I absolutely LOVE this resource! GoSmallBiz has a paid membership, and once again, I don't receive a commission for referrals. 

With GoSmallBiz, you get unlimited free business consultations, which includes legal matters. You also get tax & accounting info, business/legal documents, business plan software, accounting tracking software, website builder, website analysis(critique), business courses, and tons of other tools and resources. 

The only drawback that I could find about the service is that the consultations are done by messaging through the website, and it takes up to 2 days for a response. However, it's still an incredibly value for the price. 

There's a couple options when it comes to the pricing/plan.
Option 1: $40 per month
Option 2: $15 per month if you add it onto your legalshield business plan, (which was mentioned earlier in this article).


Did this just save you time, money, and headache?! I'm still a pretty small operation in the grand scheme of the internet, so please don't forget to share this valuable info with your friends!

Tuesday, March 5, 2019

Benefits & Drawbacks for Renting to Section 8 Tenants

Considering Becoming a Section 8 Landlord?


A lot of landlords are afraid to rent to Section 8 tenants. It's mostly due to fear of the unknown.

I've seen many landlords ask questions like:
  • Would a Section 8 tenant neglect or tear up my property?
  • Are Section 8 tenants habitually late on rent?
  • Are Section 8 tenants a neighborhood nuisance?
  • Would Section 8 tenants bring drugs or crime to my property?
  • Is there going to be a lot of paperwork or red tape when renting to someone Section 8?


So before we get into the benefits and drawbacks of renting to Section 8 tenants, let's clarify some of the typical concerns...

There’s a lot of stigma when it comes to Section 8 tenants. I really hate that, because not all Section 8 tenants are bad. You may hear stories about how a Section 8 tenant tore up the property, or caused a lot of problems for a landlord. However, when something like this happens, there’s a few more variables than just a tenant being on Section 8.

In many situations, landlords don’t screen their tenants thoroughly-- or they will give a tenant the benefit of the doubt after seeing a couple of dings on the tenant’s background. Some landlords hastily want to hurry up and get a new tenant into a unit asap to avoid any more days or weeks of rent loss. However, it's always better to wait a week or two for the right tenant to come along, than to hastily rent to one who might cost you more in the long run.


Now, it’s not always the landlords fault. Bad tenants can happen to good landlords. Just like in any business scenario, you can encounter tenants who are naive, negligent, and don’t understand responsibility and accountability-- but that's with any tenant across the board. There are some special case scenarios when, even though a tenant was screened carefully, the tenant ends up still being a pain in the ass, but those instances will only happen far and few between, as long as you’re screening carefully. In other words, you can stand to win more than you lose with Section 8 tenants.


As always Screen… screen…. screen the crap out of your prospective tenants!! That’s what application fees are for! Also, contact all previous landlords and personal references listed on the application. I do realize that personal references might give you a biased opinion on the applicant, but the advantage of this is that you can get an idea of the kind of company the perspective tenant keeps.

It might suck to go through the extra motions of cold calling strangers, but you can gain some valuable information from it! If a previous landlord had a bad experience with a tenant, I’m sure they’d love to tell you about it…. I mean, wouldn’t you? But if you REALLY can't stand calling previous landlords, you can use a service like Rent Prep, and they'll call them on your behalf.



Benefits of Renting to Section 8 Tenants:


Section 8 wants to give you the highest available market rate rent for your area. They want to pay you as much as they can, because like how many nonprofits work, the more money they give, the more funding they receive….  but since they are under the umbrella of HUD, they have to put a cap on the amount of rent they can give a landlord for a property, so they do an evaluation of Fair Market Rent for your rental area. I always say, when in doubt, ask for the higher amount. The worst they will do is come back with a lower number, which probably won’t be anywhere near as bad as you thought it was.

You get the bulk of your monthly rent like Clockwork: Landlords are paid on time every month for the portion of rent that Sec 8 covers, which is usually the larger portion.


You have someone called a Landlord Liaison at Section 8: Most landlords don’t know that they have such a thing. Sometimes they’re helpful, and sometimes they’re not. Depends on what kind of person works in that department in your local housing authority.


Renting in not so great areas can be just as lucrative as renting in “good” areas. Typically, in a not so great area, you can buy a property for less than you would in a higher market area. However, section 8 is also likely to pay you more monthly rent for a property (in the not-so-great areas) than any regular out of pocket market-rate-renter. When rent is sky high and the rental market is up. People are looking for less expensive alternatives, so you’re not as likely to find someone who will pay the amount that section 8 is willing to pay.


For example, there’s a rental unit in a not-so-great area that will rent for $950 through Section 8, but the people paying out of pocket for the unit are usually only willing to pay around $800 per month.

You can apply for a rent increase every year.
Every year, you can apply to increase the rent. Section 8 will re-evaluate the property and the market to determine if you can get approved for a rent increase. I've seen cases where a previous landlord hadn't raised the rent in 2 years, and when we put in for a rent increase, we were able to get $200 more per month in rent. That's a huge hike! It's not always like that, but you should always try to go for what the market will bear. Those previous landlords were missing out on 2,400 per year, just for 1 property!


Despite what most think, it’s not difficult to become a Section 8 Landlord:
You don’t have to be listed with the Housing Authority as a "Section 8 Landlord", but it will help Section 8 tenants find you. Another thing you can do is say "Section 8 Ok" in your advertisements. If you're not listed as a "Section 8 Landlord", and you happen to come across a Section 8 tenant, all you have to do is file some paperwork, known as RTA (Request for Tenancy Approval).

Basically, here's what happens...
  • You screen the tenant to make sure they're a good fit
  • The tenant gets the RTA from Sec. 8
  • Tenant brings it to you
  • You fill it out and turn it into Sec 8

 Check to see if they have a "Fast Track" for RTAs at your local Section 8 office. If so, you can get an application approved as fast as 24 hours. However, if you turn in the RTA the regular way, may end up waiting weeks for approval, which means you lose money waiting.



Drawbacks of Renting to Section 8 Tenants:


Communication with Section 8 can be tough: It’s tough to reach people at Section 8, especially when you’re a new landlord… but once you become more known to them, you may be able to get a directory of the staff. However, that list is ever changing as they get new staff, or as people change positions within the company. Sometimes, you may have to pay them a direct visit or give them a call… but there’s also an option to email… which can be a good thing so that the Section 8 worker can get back to you when they have time instead of trying to line up their schedule with yours.

Yearly Inspections: If you have a Section 8 tenant living in your rental property, Section 8 will do an annual inspection to ensure the property is being maintained. If something is wrong with the property, you'll have to correct it. Though, I don't know if this is necessarily a Drawback, because you'd probably have to maintain and fix whatever with the property anyway-- unless you have an aspiration to be a slumlord. LOL

Section 8 inspectors can be nit-picky: Something as small as a carbon monoxide detector placement can make you fail an inspection… and if you fail, they will abate the rent- meaning you won’t get rent for the days  that go by before you pass the next inspection. Here’s a Section 8 inspection checklist that you may find useful, so that you can make sure to cross your T's and dot your I’s prior to the inspection.  

Learning the ropes: It may take you a little time to learn the the rules and how everything works. However, Section 8 does have a orientation class as well as a ton of other resources for landlords. They have meetings for landlords and guest speakers come in that will help with more than just Section 8 related things. As mentioned above, you also have a landlord liaison if you need help through something.

Somewhat of a Risk: As I said above, you have a risk renting to anyone. However, Section 8 tenants are in a lower income bracket, and with that may come a lack of resources, exposure to certain things, as well as awareness, which may make them unable to properly care for and maintain a property responsibly. However, not all Sec 8 tenants are lacking in those areas. Some have had a lot of experiences, and can responsibly maintain a property. A Sec 8 tenant may be looking to move into your place simply because the previous landlord couldn't meet standards, or because they want a better neighborhood, school district, or better property to live in-- Nothing wrong with that! Either way.... Screen! Screen! Screen!

1st Month & Possibly 2nd Month's Rent will be delayed: Sometimes it takes a while for landlords to get their rent from Section 8 upon first acquiring a tenant. However, they do catch up, and once it gets established in the system, the money will come in automatically like clock work.



Other Things You Should Know


Section 8 Tenants can lose their voucher. They have to do things like pay their portion of the rent on time or they could lose their section 8 voucher. However, just because they have a lease violation, doesn’t mean they will lose their voucher… The housing authority views that as something between the landlord and tenant. However, if you end up having to evict a tenant, Section 8 may take away their voucher.

Section 8 vouchers are difficult to get. Getting a Section 8 voucher is very difficult, and is a very long grueling process. They typically have to first wait for years until the Section 8 waiting list suddenly opens up. And when the waitlist actually does open, there’s no mail notices or calls that bring this info to Section 8 applicants. They have to either see or read it on the news or just happen to hear about it through a friend or social organization. Some people miss the opportunity to get a voucher on that basis alone.


The Section 8 voucher is one of the most sought after commodities. After going through the waiting game, applicants have to wait in line for hours, fill out an application, put in a ton of paperwork…. And they’re usually waiting for some years, struggling, living with relatives, living in a less than desirable place owned by a slumlord, and doing whatever they can to keep a roof over their head until they get this long awaited voucher…. Unless someone is absolutely crazy or entitled, do you really think a Section 8 tenant would want to risk losing their voucher after all that time, effort, frustration, and years of waiting? Not to mention, if they do end up losing their voucher, depending on the situation, they may have to wait for years to re-apply for another voucher.

Tenant pays his/her own deposit. Section 8 does not provide that.


Section 8 will pay more for certain amenities and areas.
If you have things like a dishwasher, central air, etc. Section 8 will figure that in when they calculate the amount of rent they will give you. Also, if your unit is in a nicer area, Section 8 will pay whatever the market rate is in the area. However, there is a cap to what they will pay, and you cannot take a side payment from the tenant to make up for the difference, or you and the tenant could be banned from the program.





A couple of other things that will help you have a better experience with any tenant:

  • If the perspective tenant omits info from the application, chances are, there’s a reason… and you absolutely can reject an application for incomplete information.
  • Make sure your unit is the kind of unit that would attract better quality tenants.
  • Train your tenants. Lay down the ground rules. Make a separate sheet of housekeeping rules bullet points when they sign the lease. Before they move out, give them a checklist of what is the tenant’s responsibility prior to move out.
  • Follow through: Tenants will sometimes try to cross boundaries to see how far you're willing to go. They might pay a few dollars short on rent… or pay one day after the 5th, or do small damages as a result of a little negligence to the property. As things come up, you must follow through with what it says on your lease, or the tenant will not take you seriously. However, if you have an overall good tenant,  you can be reasonable you can cut a little slack now and then, (when it matters most and seems to be the most reasonable) but don’t make a habit of it or the tenant will expect it all of the time. Basically, keep good tenants happy, but make tenants who test your boundaries aware that you're not on their bullsiht. Nip it in the bud if anything shady with them ever starts up.



Bottom line: As a landlord, it's your responsibility to put the right tenants in your units--regardless of where the rent comes from. So why not open it up to Sec 8 tenants AND Market Rate renters? It's not like you'd be forced to rent to a specific Sec 8 applicant if they don't pass the background check or aren't a good fit. You're the one who makes the ultimate decision. Not to mention, you’ll likely get your unit rented much sooner than if you were to limit yourself to just one type of tenant.