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Getting a Divorce? Consider a Neutral Interim Third Party to Manage that Real Estate…

February 19, 2013 Leave a comment

Divorces stink. No way around it, and no matter how cordial everyone’s trying to be. The easiest divorces are usually those where there are no kids, no wealth and no real estate involved.

Add any – or all – of those three into the mix, and it suddenly gets very complicated. No matter how well you used to communicate, or how much you once trusted the other person, questions can start popping up….

A divorce when real estate is involved can get nasty really fast. Who’s in charge of the day to day management? Who collects the rents? Who pays the bills? Who’s pocketing money or squandering it on personal – not business – expenses? Is the property for sale – and if so, who’s hiring the broker, and who’s agreeing to the listing price? Are the lawns being mowed? Are the furnaces being maintained? Are the units being filled? Are those bills really being paid?

We know of several situations in which a divorce dragged on and on not because of arguments over the kids or someone’s affair or who gets the house… but because of the real estate. Even when it’s in one partner’s name, fights over real estate can get very messy, and keep a divorce in the courts for far longer than is good for anyone (except the lawyers).
Image - Broken Heart Line Drawing
If you own real estate and are thinking of getting a divorce – or are already in the midst of one – you might want to consider hiring an interim property manager to handle the finances and day to day management of the property. (Or you could ask the court to appoint someone, in which case both you and your spouse will be asked to provide the names of 2-3 property management companies along with their fee structures.)

Yes, you’ll pay around 10-11% of the rental income to the property manager (some of which might have ended up going to the legal guys anyway), but you’ll rest easier knowing exactly what’s going on with that real estate.

One quick tip… Make sure the property management firm you choose is impartial. This doesn’t necessarily mean that you should choose someone you don’t know, but it definitely does mean you should choose someone who knows that his job is to manage the real estate to the best of his (or her) ability – and not to get involved with taking sides in the divorce.

As I said, divorce stinks. Take a bit of the pain away by letting someone else manage the headaches of the real estate for a while.

I Want to Find an Apartment for $350, Part 2.

February 8, 2011 Leave a comment
Part two.
 
In order to keep my previous blog reasonably short and readable (a prospective renter was looking for a $350 per month apartment in her town – a town where Fair Market Rents for FY 2010 were $705 per month, or twice what she was looking to pay), I didn’t go into some possibilities the prospective tenant could look into.
 
I’ll offer some thoughts here.
 
Note: the prospective renter did not explain why she only had a $350 per month budget.  It could have been that she and her fiance were choosing to save as much money as possible for some big event (such as getting married), or it could be that they just plain don’t have the money.
 
Either way, an apartment that fits the budget she’s offered will be hard to find.  There are options, though and I hope one of them works out for her.  Obviously she’s trying, since she posted her request on line.
 
a) The renter and her fiance could move into a larger apartment with some friends, and all could split the rent.  This has been happening more and more lately, as families and friends double up.  While some landlords don’t like it, others are okay since they believe they have a better chance of keeping the unit rented.
 
b) The renter and her fiance could consider moving in with a family member temporarily.
 
c) The renter and her fiance could go to General Assistance for short-term help or Section 8 (I know… there’s a waiting list).
 
d) The renter could try to find a family willing to rent out a room or two, even if it weren’t an actual apartment.  She might do well to post on church bulletin boards or meet with her pastor regarding her situation.
 
e) I’m presuming she wants to stay in her current small town for work or other reasons.  If not, then it might be worth moving to a less expensive town or county; again, it could just be temporary.
 
I suspect the prospective renter has considered all of these option, but wanted to throw them out anyway.

I Want to Find an Apartment for $350 per Month in My Town

February 8, 2011 Leave a comment

Question & Answer on a Real Estate Site:

My fiance and I want to rent an apartment in our town for about $350 a month.  Can anyone help?

My amended and de-identified response (and I sure wish I’d been able to offer some hope for this couple):

Good morning,

My husband owns a property management & leasing company (http://www.onthespotrentals.com), and hears this kind of question several times a day. “Where can I get an apartment for under $500?” “I want to rent a 3 bedroom house, utilities included, for $700 a month”, etc. Many people will add that they’re “handy” and can fix the place up in exchange for reduced rent.

The unfortunate reality is that there’s almost nothing out there that’s that cheap (and if it was, you truly would not want to live there).  Last year (Fiscal Year 2010), the Fair Market Rent for a one-bedroom apartment in your county was $705 per month. That’s twice what you want to pay, and means it will be almost impossible to find anything in your price range.

I’ve heard tenants complain that the landlords are overcharging, and gouging the tenants with their prices, but mostly that’s not at all true.  It’s very expensive to own & maintain an apartment building (I know this from personal experience because I used to own several). Depending on the size of the building and its orignal cost, the mortgage, taxes and insurance can easily be a couple of thousand dollars a month. Then there’s heat, and common electricity, and water/sewer, and maintenance, and snow plowing and lawn care… many buildings lose money on a monthly basis – the landlord is just hoping to make money in the long run.

I do hope someone else has a different answer than I can offer, but I’m afraid you’re going to find it extremely difficult to get an apartment for as little as you’re looking to pay.

Good luck,
Linda Snyder
Marketing & Development
On the Spot Rentals

I’m Concerned My Apartment Building May Be For Sale

February 5, 2011 1 comment

A recent post on Trulia asked: “I’m concerned the building where I’m renting an apartment will be up for sale. Is it now? Can I be alerted if gets put on the market?”

One real estate agent out of the southwestern U.S. stated that the tenant would be able to tell because all Realtors will put a lockbox on the apartment building. Another Realtor more correctly responded that a Realtor may or may not put a lockbox on the building.

Here’s our response:

I agree with the last Realtor’s response that the lack of a lockbox doesn’t mean anything. The property could be for sale by owner, or the owner might choose not to have a lockbox on the building. Or it could be in foreclosure, or it could not be for sale at all.

In Maine a property can be searched by the general public by going to http://www.mainelistings.com. You’ll be able to find out if your building is currently for sale by inputting your address. However, this doesn’t necesssarily solve the poster’s question, if the property is for sale by owner, or if it’s in foreclosure.

The law states you must be given 24 hours notice for any kind of inspection, which includes allowing a potential buyer to look at your apartment. Unfortunately, it is entirely possible that a landlord would put a property on the market without telling the tenants until the first buyer showing is scheduled… and that could be when you first find out. It happened to a friend of mine.

I don’t know how many units your building contains but the reality is that the more there are, the less likely a potential buyer will want to see yours on a first showing. (Many multi-unit buyers don’t go through every single unit the first time through; they just want to get a sense of whether the property would be a good investment.) If you’re in a larger building and the tenants don’t talk to each other, it’s possible a potential buyer would go through one of their apartments and not yours.. and you’d never know.

Is there a reason why you’re worrying about this? Has the landlord been having difficulties paying for heat or other bills? Have “insurance companies” been around, taking pictures? Often that’s an indication that something is up… the so-called insurance company is actually an appraiser or Realtor.

If the building does go on the market to sell, your best bet is to make sure you are current with your rent, and that you’re keeping your apartment in excellent shape. A new landlord won’t usually want to lose a good tenant.

If there’s a possible foreclosure in the horizon, you’ll still want to stay current on your rent in order to have good references when it’s time to look for a new place to live.

If you find yourself in a difficult position and need a new rental, please give John “Johnny On the Spot” a call at 207.713.0674.

In the meantime, unless there are some things going on that you haven’t mentioned, it sounds like you’re okay – no sense in worrying about something that may not be an issue at all.

Another Slam on Landlords

January 22, 2011 Leave a comment

 
John owns a rental lease-up and property management company.  He deals with pet issues every day; landlords who don’t allow pets, or insurance companies that won’t allow certain dog breeds, or tenants who desperately want to keep their one cat or 6 rottweilers….
 
It’s already difficult enough to match people with pets and landlords who allow them.  To now make the landlord responsible if a dog bites, or inadvertently knocks someone over, or breaks a plant pot, or pees in your bushes, will mean landlords will just plain stop allowing any pets at all.  And tenants will be compelled to give up their pets, further choking the animal shelters which are already dealing with more unwanted pets than they can handle.
 
So John contacted the legislator sponsoring the bill and was told “I don’t like the bill either, nor do I agree with it, but a constituent asked me to sponsor it”.  The legislator allowed as to how the bill probably would not pass, but reiterated over a couple of e-mails that he was asked to sponsor it.  The implication was that he had no alternative but to present the bill because a constituent had asked him to.
 
When John contacted a legislator friend of ours regarding this, he was told essentially the same thing… that it’s not unusual for legislators to sponsor bills they don’t believe in because a single constituent wants it.
 
Does this make sense?  Isn’t this a serious waste of taxpayer money, and one that bogs down Maine’s legislative system so that they can’t work on the important issues?
 
What do you think?
 
Note: This blog is essentially identical to one posted on ReGroup Biz titled “Why the Legislature is So Expensive…”
 
Should legislators feel compelled to submit a bill to the legislature even if they know it’s stupid, just because a constituent wants them to?
 

My husband John noticed a bill before the Maine legislature that would be a killer for landlords and tenants alike if it were to pass:  Essentially, the responsibility for a pet’s behavior will no longer be just the pet owner’s but also the landlord’s. 

Sad to Say, Some Prospective Tenants Will Lie Even When There’s No Reason To.

January 2, 2011 1 comment

01.02.2011. 

My husband John (“Johnny On the Spot” of On the Spot Rentals) is always very clear with prospective tenants about background checks. 

The application is not a formality, he will do the background checks, and if they have anything he should be aware of, they’d better fess up now—since if they tell him their background is clean, and he finds out otherwise, that will immediately disqualify them.

John is also upfront with prospects that he knows the economy has been horrendous and that many people now have poor credit records as a result.  He says his biggest concerns are a history of evictions or skipping out on rent and utility bills… past behavior is indeed a predictor of future.  He gives prospects the opportunity to discuss what he will find before he undergoes the credit & background checks. 

You would think that most people would be relieved, and would own up to past hits or black marks.  Amazingly, he’s run across just a small minority of people willing to offer up the truth—even knowing he’s going to find out within the next 24 hours. 

A surprising number will look him right in the eye and say they understand, but actually they aren’t ready to make a decision on an apartment yet, even though they’ve just completed all the application forms.  Worse, quite a few have looked him right in the eye and said, “Of course… but you’ll find nothing to worry about.” 

For example, there was the State prison guard who laughed and said, “I’m a State employee.  I couldn’t work for the State if I had a criminal background”.  Yet she did, and three (3!) recent evictions, too.

And there was the couple who said, “Yes sir, we understand” and turned out to have a string of evictions, had skated repeatedly on utilities bills, and had even moved from another state, apparently to avoid the court system because of non-payment of more than $17,000 in child support… and in the past 3 years had skipped out on another $18,000 in child support.

It was this last couple who was the final straw.  John, who had wanted to avoid asking prospects upfront for the $25 per person fee it costs for the credit history & background check (this does not include his time chasing down employers and former landlords for references), immediately implemented the same policy that many other property management companies have. 

Now, before he will submit an application for a background check, he gets the $25 per person fee upfront.  No $25, no background check; and therefore no way the prospect will be allowed to rent the house or apartment.

It’s been an eye-opening and expensive lesson for a small businessman who believed that if he were open and honest, that others would be in return. 

Thank goodness for such wonderful people as the young wife who recently said, “My husband has a felony assault charge from several years ago, but he’s stopped drinking since then”, or the couple who had a plausible explanation for the eviction John would find. 

It’s so cliché, but still…. the truth is always the best route to take.

http://www.onthespotrentals.com

http://www.facebook.com/onthespotrentals

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