• About Frank

  • Enter your email address to subscribe to this blog and receive notifications of new posts by email.

    Join 613 other followers

  • Frank Rizzi manages Bos Commercial in West Covina and has been in real estate since 1988. Since then, he has made millions for his investors over the last decade.

    With his team of experts, he has built a solid reputation as a responsive expert with in-depth market perspective of a local firm coupled with the sophisticated capabilities of a national company.

    BOS Commercial has positioned itself to handle every aspect of your commercial property
    investment whether it be purchases, management, leasing, renovations, or sale of your property.

Tenant Pays Rent Late – What Do I Do?

Late rent is probably one of the biggest problems landlords face. Our goal is to minimize it or eliminate it. Tenants need to be properly trained just like a new employee would. Many tenants bring bad habits from their past experiences with landlords that are too laxed or nice. You need to be very consistent with enforcing your late rent policy and it should be automatic.

Here are the steps…

Step 1: Your lease agreement or rental agreement must spell out in detail what the late rent fees are. Example: $50.00 late fee if rent is not received by the first of the month and an additional $5.00 per day starting on the second day of the month until rent is received. Late fees not to exceed $100.00 in a one month period.

Step 2: Call your tenant by the third day of the month. Let them know that you have not received the rent. And if you do not receive it by the fifth, you will be sending them a “pay or quit” notice. In my state it is a 10 day pay or vacate notice. It is very important to read up on your states landlord tenant laws. Especially when dealing with non payment of rent and eviction procedures.

Step 3: If you have not received the rent by the fifth of the month send a pay or quit notice by certified mail or by the procedures outlined in your states landlord tenant law. Also send a letter stating all of the negative effects an eviction will have on them and their future.

Step 4: If you still have not received the rent by the last day of the pay or quit notice than file for eviction immediately. I recommend hiring an experienced attorney for this. Especially if it is your first eviction.

Things you should not do:

Do not accept a partial rent payment because this can have a negative effect on an eviction.
Do not try and get rid of your tenant by: intimidation, threats, changing locks, turning off utilities, or physical removal. This is illegal without a final eviction judgment.

Things you should do:

Always follow through with your late rent fees. If you don’t, the message you send a tenant: It’s ok to be late with the rent.
Send a separate bill to the tenant for the late rent fees and state the due date you expect them.
Physically stay away from a tenant during the eviction process.
Communicate only by phone or in writing.

8 Insider Secrets You Must Know Before Hiring a Property Management Company

These tips will save you at least $600 a year on each rental property you own. You will be amazed at all the hidden fees and overcharging that occurs in this industry on a regular basis. It is in your best interest to be well informed.

1) What is Your Leasing Fee?

A large percentage of management companies charge 100% of the first month’s rent to find a tenant for you. I would recommend paying no more than 50% of the first month’s rent. There are true expenses in finding a tenant. A property manager typically will list the property in a Multiple Listing Service, run a Craig’s List Ad, and put up signs at your rental property. All of this takes time and money, but it certainly doesn’t equate to a full month’s rent.

Make sure the leasing fee is only due when they successfully rent your rental property. Some of companies try to charge you this fee up front whether they are successful or not.

2) Avoid National Real Estate Companies with a Property Management Division.

Because most of these companies are franchises they charge a ton of extra fees and higher commissions because of their franchise fees.

Their main business is selling homes and not providing quality property management services for the long haul. This is usually just a sideline business for the owner/broker and is a good way to develop future listings for his or her company to sell.

Stick with a local, non-brand property management company that does not sell homes for the majority of their business. You want a company that specializes only in property management. These companies will typically provide better services and are much more creative in finding you a qualified tenant.

3) Late fee to owner if tenant pays late.

This is ridiculous because they also charge the tenant a late fee. Why should you pay extra to have them do their job? That is why you pay them a management fee in the first place

4) Advertising Fee:

There shouldn’t be any advertising fees, but I have seen some management companies charge up to $750. They claim it is necessary to pay for all the advertising they do in newspapers and magazines. Let me point out an important change in every market place, newspaper ads do not work anymore! CraigsList is far superior, free, and dominants all markets with exception of small, rural towns. We get 8 times more calls from our CraigsList ads as compared to newspaper ads.

The real estate magazines also do not generate much interest because their primary purpose is to sell homes and not to rent them.

5) Set-up/Application Fee:

Many companies charge you $300-$500 to set up and process your rental property into their system. This fee really upsets me. It takes 5 minutes to put a rental property into a typical property management software. This is simply a profit center and should not be paid.

Once again it only takes 5 to 10 minutes maximum to enter your rental property into the computer. Even if it took 2 hours, $250 is a bit high for data entry work.

6) Can You Fire Them Without Penalty?

This is a tricky one that really costs a lot of property owners. You should request their management contract and review it very carefully. Most of these contracts state that you cannot fire them without paying $500-$1000 in penalties.

Their explanation goes something like this; “we spent a lot of time and effort finding you a tenant and deserve to earn the management fee for the entire year.” Your answer should be that you covered that time and effort by paying a leasing fee. If they are doing a poor job or overcharging you, you should be able to fire them with a 30 day notice. If they do not agree, you should find somebody else.

I have found numerous examples of management companies holding their owners hostage and threatening law suits if they fire them before the management contract is up. Be very careful about this because you do not want to be stuck with a management company that is doing a horrible job.

7) Check to Make Sure You Know of Every Additional Fee

You will be very surprised about the various little fees some property management companies tack on in addition to the management fee. I have already mentioned some above but there are other ones. For example, they might charge you $50-$100 to give a 3 day notice to the tenant in the event that he or she is late with the rent. They could also charge you extra money if you request copies of receipts for maintenance done on the property.

The company might tack on a fee to send your money by check instead of direct deposit, or vice-a-versa. It would be best to make sure they put everything in writing, in the management contract. You want no surprises.

8 ) Can you talk to the Owner of the Company?

You want to speak to the owner and ask him about the items I mentioned above because the owner is the only one who can negotiate and you get the real answers from the horse’s mouth.

It is a good idea to casually ask the owner if he or she invests in rental properties. It is a positive sign if the answer is yes. Listen closely to how you feel when the owner answers your questions. He should convey a feeling of professionalism and competence. Make sure you request some testimonials or references from other customers. If any excuse is made about not providing them, politely find another company.

Great tips If You’re Thinking Of Buying A House in 2010

If you rent, you may have been waiting for the right time to make the switch from renter to home owner, and with the way the market is, there has never been a better time than now to own your own home. When searching, condsider a few of these tips…

Review your Goals

If actually owning the place in which you live or not having to make payments for someone else’s home instead of your own is important to you, then you are headed in the right direction to owning your own home.

What can you afford?

Remember, you need to handle the down payment and closing costs. So make sure that you pick a place that is in within your budget and that your capital is liquid. Make sure you have quick and easy access to your cash ready so you don’t waste any opportunities that may quickly arise.

Know your score!        

Your credit score will determine your ability to qualify for a loan and the interest rate you’ll get on that loan, So make sure it’s accurate! Go to AnnualCreditReport.com to get a free copy of your credit reports from the three credit ratings agencies.. Also, paying down debts can boost your credit scores quickly. Make sure your score is the best that it can be!

Do your research

Are you looking for a House, Condo or Apartment? Do you like The Valley or the beach? Check out open houses and drive through neighborhoods, look at MLS listings, shop around. There is no substitute for being “up to speed” on the market you plan to buy in. You’ll know a good deal when you see one.

Don’t be afraid to get professional help        

Knowledge and experience are a crucial element to making sound financial decisions. For making one of the most important decisions of your life, you should use an agent, use some else’s expertise and experience to benefit you as much as possible.

Go for it! 

Sometimes we feel that we should wait for even more choices or a better deal, but if you see and opportunity, seize it, or someone else will.  People who are fearful of change stay exactly where they are, but those that take action are the ones who take advantage when the occasion arises!

Questions

Now that the site is up and running, feel free to ask any questions you might have in the real estate world!

Welcome to the new “The Commercial Expert” blog page!

Welcome to the new “the Commercial Expert” blog page! Bos Commercial’s blog site for all your real estate questions and comments.  Every day we will be here to fill you in on commercial real estate issues, where the market is going, forclosures, management issues and the like. Feel free to ask us a question or post a comment on any commercial real estate issue.