I’m famous!

Well, not exactly.

I was at Home Depot loading up my van for a project my wife roped me into when a guy walked by pushing a cart. “Hey,” he said. “Aren’t you that greedy landlord?”

Thinking he might be some tenant whom I had to evict, I cautiously looked at him.

“I read your book. The one about being a greedy landlord, so I knew you lived in this area. I’m following you on Facebook now. Your picture’s there.” He shook my hand.

“I’ve been in the business for around 30 years best I can remember. Single-family homes, warehouses, industrial, you name it I’ve owned it. You had a few good ideas that I had never tried.”

I thanked him for reading What You Must Know BEFORE Becoming a Greedy Landlord.

“But I gotta disagree with you on one thing.”

“Oh?”

“Yeah, the part where you say to stay away from condos. I bought my first one 12 years ago. Now I have 15. My wife and I are getting up in years, and we travel quite a bit, so it’s worked out ok. I’ve learned a few lessons along the way, though.”

“I’d love to hear them.”

“I study the HOA documents, including the financials. Boring as hell but important to know what you’re getting into, especially regarding renting out a unit. Then I talk to the sellers to find out how easy it is to get along with the board. But you can’t always believe them.

“I walk or ride my bicycle around the neighborhood. Better than driving around in my truck. Let’s you see the place up close and personal. How well do they maintain the common grounds, the pool area, parking lot? How well do the other owners take care of their places? Are fences falling down? Stuff like that.

“Then if I actually buy the place, I volunteer for the board. Or at the least I show up for the board meetings so I can speak up if they try to sneak something in about rentals. 

"What I’m saying is that the way our area is developing if you eliminate HOAs entirely, you could be missing out on some nice rentals.”

We said our goodbyes, and I thanked him again for reading my book.

While driving home I thought about what he had said ...

Just about all the new homes in our area have HOAs. And I’m always open to an opinion that’s different from mine … after all, that’s what makes a market. But I’ve had the most success with older single-family homes in working-class neighborhoods. So for now I’ll stick to my Rule #4 and avoid condos and HOAs.

For more ideas on buying and managing rental properties, pick up a copy of What You Must Know BEFORE Becoming a Greedy Landlord. It’s available from Barnes & Noble, Booklocker, iTunes, and kobo. You can also order it in paperback and Kindle formats at Amazon.

Airbnb can be great for travelers, but a disaster for landlords

Have you ever used Airbnb? It’s the online service that helps you find lodging in rooms, entire homes, and even castles and igloos around the world.

It sounds like a great deal for families who want to travel, but can’t afford to buy every meal out and pay for two hotel rooms. I know my nephew and five of his friends rented a three-bedroom apartment in NY for a fraction of what a moderate-priced hotel would have cost.

Just for a comparison I could relate to, I found a room in my area of Palm Beach County through Airbnb for two people 5 minutes from the beach and 1 minute from the golf course for $142 a night in February (the height of the tourist season). A top-rated hotel on the beach will cost at least twice that amount.  

If you’re thinking of converting an empty property into a vacation rental to pick up extra money, better do your homework. Municipalities are cracking down on landlords who do exactly that. San Francisco, for one, is seeking civil penalties of up to $20 per day for Planning Code violations; up to $2,500 for each unlawful business act; disgorgement of illegally obtained profits; and attorney’s fees.

I’m going to assume that if you, as a smart landlord, have turned your properties into short-term rentals you’ve abided by the laws in your area.   

But what if your tenant snubs his nose at the law and turns your home into a vacation rental?

First off, neighbors and HOAs might have a problem with random people coming and going with their luggage at all hours. Drug dealings, prostitution? Imaginations can run wild. Copies of keys floating around could cause security concerns in an apartment building, too.

Then there is the issue of extra wear and tear on your property.

Suppose you discover your tenant is subletting, and you kick him out? I read about a landlord who evicted a tenant for renting a room to an Airbnb guest for 30 days. The tenant left, but the Airbnb guest wouldn’t budge until his 30 days was up because he wasn’t part of the lease. Imagine moving back into your home and having a new roommate!

An even worse situation is going on in New York where a tenant has amassed $250,000 in fines for illegally turning her apartment into a hotel. The landlord is getting hit with fines, too … $61,000 at the last count. 

Although I don’t put much faith in leases, make sure they include no-sublet clauses in case you end up in court. Also, in the rental application ask how many people will occupy the home, and put that in the lease, too. And on your monthly inspection if it looks as though more people are living there than agreed, immediately remind the tenant of the violation in writing.

For more ideas on how to better manage your rental properties, order a copy of my latest book, What You Must Know BEFORE Becoming a Greedy Landlord.