rental payment question

[look 171]

I have a neighborhood couple in their early 50s who want to rent my home, two houses up from me. They really want to stay in the hills here and it is close to work. From the beginning, they said monthly was a bit too much (they didn't want to ay that much). After a couple months of searching, they found nothing that would work for them. I, of course, held firm on my rental rate. Her and her husband had been calling me in the past two weeks about renting the place on my rental terms. In the beginning, I said no, but now she wants to pay us for the whole year up front just to proof that they are good for the amount and want to sign for a year. I can't figure it out if there are any scams or tricks associated with paying that rent money up front. This includes the first month's rent and security deposit. Husband really like the place because its quiet and has no back yard neighbors. he's a Hollywood writer. Pretty nice couple as far I can see. Any thoughts and advice?

[Gogar]

So your place has sat empty for 2-3 months?


Seems to me that you always hear lots of California tenant rights horror stories, but just do your homework on them and start generating some income!

[Eric Coffey]

I'd jump on it. Of course, I'd still put them through the standard vetting process (background/credit check, employment/income verification, etc.). If the guy is a writer, he may have just sold a script or got paid for some contract work and is now sitting on a nice cash-cushion. However, if neither of them hold a "normal" W2 job, their income may not be very consistent.

Also, if you do lease it with ANY rent monies up front that are in addition to the legal limits, make sure that you include a waiver/verbiage in the contract that they are doing so voluntarily, and that tenants are aware that doing so is not a requirement. In fact, I'd write it up as a normal lease, stipulating the legal amounts due, then put the waiver/verbiage for the additional volunteered rent in an addendum. A year up front would actually be 12 payments + security deposit + any non-refundable cleaning/pet fees, so be sure they know that going in.

I'd make sure funds are legit/clear prior to handing over the keys as well. YMMV...

[look 171]

Originally Posted by Gogar

So your place has sat empty for 2-3 months?


Seems to me that you always hear lots of California tenant rights horror stories, but just do your homework on them and start generating some income!

It sat for some time, coming up 8 months.

We put an ad out some time ago but got the typical bunch of young men who are chasing the Hollywood dream who want to split rent between 4 people. No thanks. Others that can barely afford the monthly rent but still they try to talk us down knowing what the rent amount is. Some want to spend my time just to have a look knowing they can't afford it. With my Dad in the hospital, and busy with work, I just took it off the market for a few just to take a break from it. That's really the reason we were reluctant to rent to just anyone. I rather let it sit then deal with renters rights and lawyers.

[look 171]

Originally Posted by Eric Coffey

I'd jump on it. Of course, I'd still put them through the standard vetting process (background/credit check, employment/income verification, etc.). If the guy is a writer, he may have just sold a script or got paid for some contract work and is now sitting on a nice cash-cushion. However, if neither of them hold a "normal" W2 job, their income may not be very consistent.

My wife and I are thinking about the same thing. Personally, I much rather take their money month to month and sign a yearly lease. I realized that most people aren't too good with money management. Money goes through that hole it just burned in their pockets.

Also, if you do lease it with ANY rent monies up front that are in addition to the legal limits, make sure that you include a waiver/verbiage in the contract that they are doing so voluntarily, and that tenants are aware that doing so is not a requirement. In fact, I'd write it up as a normal lease, stipulating the legal amounts due, then put the waiver/verbiage for the additional volunteered rent in an addendum. A year up front would actually be 12 payments + security deposit + any non-refundable cleaning/pet fees, so be sure they know that going in.

I'd make sure funds are legit/clear prior to handing over the keys as well. YMMV...

Good tip, thanks

[stomachmonkey]

How does paying upfront impact your legal rights to boot their asses if they turn out to be trouble?

[look 171]

Originally Posted by stomachmonkey

How does paying upfront impact your legal rights to boot their asses if they turn out to be trouble?

don't know. After 19 days or was it 29 days, they will have renter's right. There's no need to get rid of them since they already paid. After a year, if they are a PITA, then I can raise rent or find a way to get rid of them. The best way to get rid of a renter is for them to not pay rent. Good thing is, its a single family home so it doesn't fall under rent control. Now, that's s PITA.

[Gogar]

What if they pay for a year and decide to . . . remove the roof or something after 2 months?

LOL

[look 171]

Originally Posted by Gogar

What if they pay for a year and decide to . . . remove the roof or something after 2 months?

LOL

Oh yeah, that's no joke.

A friend/client just went through this last week. Rented their 2nd home to a couple (since we are not all that PC here, both Robert and I kept saying to ourselves that's cultural) and immediately they started work on the garage. They tore open the wall to install a door and windows on the oppose side. When Robert got there a few days later, all the collar ties (pieces that keep the roof structure from collapsing) were cut off to make way for a high ceiling. Walled up the garage door and opener removed. They did all this within the first two weeks since they been in the house. I suspect they will rent the garage to offset their rent? I was brought in to access the damage. The renter kept saying "Not-a finished, Not-a finish". "Garage, we improve for you, no charge, my friend." Fooking nuts

[Gogar]

wow

[recycled sixtie]

Tenants will make or break you. I would suggest getting some references such as their friends and their bank manager. We are on the third set of tenants in our condo. Average stay so far has been four years.

In addition no references supplied no stay. Also can you get hold of a standard lease agreement?

Never come across anybody who wants to prepay a whole year....

[Eric Coffey]

Originally Posted by stomachmonkey

How does paying upfront impact your legal rights to boot their asses if they turn out to be trouble?

It wouldn't impact the tenant's or landlord's legal rights and/or obligations. If they prove to be trouble, and give the landlord a valid/legal reason to force eviction, all the same rules apply. You certainly couldn't just keep their money though.
However, if they were to damage/trash the place and repair costs were over and above the security deposit, I would certainly deduct whatever additional amount was needed to make the repairs (documentation being key there as well).
If the damage somehow exceeded the pre-paid rent ($25k+?), that would suck, but not as much as if you only had a $2k deposit.

Oh, and one thing I forgot to mention previously: Make all tenants carry renter's insurance. Have them send you a copy of the policy dec. page with you listed as an "interested party" (that way you will be notified if the policy lapses).

[look 171]

Originally Posted by recycled sixtie

Tenants will make or break you. I would suggest getting some references such as their friends and their bank manager. We are on the third set of tenants in our condo. Average stay so far has been four years.

In addition no references supplied no stay. Also can you get hold of a standard lease agreement?

Never come across anybody who wants to prepay a whole year....

Their reference seem pretty good. They have been renting from this retired cop for the pass 15 years just over the hill from us. The cop couldn't say enough good things about them. They seem to be pretty good folks.

The only reason for the big lump sum payment is that they have come across some big money and that staying in a single family home in the neighborhood is a must for them. There is only one other home for rent up here but that's 4600 bucks per month. I told her that I wasn't interested in renting it to them as they made some noise about their targeted monthly amount. They are getting close to their lease ending and the old cop sold the house, so they had to go. They want to live in the house so badly that they are willing to pay it up front for a year. Crazy. I feel a little sorry for them.

[jabb]

Something is bothering you about this deal or you would not be posting for input. I say trust your gut feeling, and I think your gut is telling you to walk away. Do not let your guard drop because they promised you the full year of rental income up front.

[bell]

do the normal rental agreement, set up an account with your bank to pay you monthly out of their funds(that they dont have access to), collect some interest on it (if legal), you'll have a legal paper trail of their money, if their references check out what's the problem?

[dad911]

Mature couple, your place has been empty, and they come with recommendation from a long-term prior landlord, posting cash up front?

What's not to love? Do your typical due diligence, I know this isn't your first rodeo, nor your local laws.

I like Bell's idea of putting rent in an interest bearing acct, to document your monthly draws.

I'd kick them back the interest if they leave the place spotless. Take pics before they move in(having just watched a landlord-tennant case on Hot Bench lol)

[DanielDudley]

Talk to your accountant, but I don't see any downside. Have you ever rented a property before ? If not, there are probably standard agreements available at Staples or similar.

Hardest part for me was not acting like a bull in a china shop at the least little thing. Most things resolve, and these people are about as close to a known quantity as you are going to get.

Don't wait too long.

[recycled sixtie]

Originally Posted by bell

do the normal rental agreement, set up an account with your bank to pay you monthly out of their funds(that they dont have access to), collect some interest on it (if legal), you'll have a legal paper trail of their money, if their references check out what's the problem?

What bell says is right. Just be firm but fair. You need a damage deposit too. Do your due diligence as mentioned above. References etc. Do you get good vibes with these folks?

[voron]

they sound desperate. renting to desperate people. no.

[Gogar]

With the old landlord's recommendation I think you should do it.

before they find something.