How to Spot a Bad Tenant: 7 Warning Signs for Landlords

Nothing affects your bottom line more than a bad tenant. Bad tenants can destroy your property, squat without paying, and leave you with a ton of headaches and expenses. Here’s how to weed out the good from the bad, and get the kind of tenant that will stay and pay:


1) Make sure they can prove their income. Not just for the last few months – Ask them for documentation that will show a history of what they made, and how they made it, for the last year.
2) Require at least first and security before move – a payment plan for last month if necessary.
3) Always do a background check.
4) Never sign a deal without a deposit equal to first month.
5) Ask for, and check, all landlord references
6) Find out why they are moving and really listen to what they are saying. No one moves just for the fun of it. If they don’t have a clear cut reason, they may be skipping out on another landlord.
7) Make sure every adult in the house is listed on the lease.
Other things to remember:

- Stop worrying about credit scores. Lots of good tenants have bad credit now Just make sure everything else checks out
- If your gut tells you they might be bad tenants, they probably will be
- Make sure you have a GREAT rental agent. They will keep your best interests at heart and not cut corners to just fill the unit quickly
- Never, EVER, agree to use last month or security to pay for past due rent. If they can’t pay now, chances are they won’t pay later. Get them out as quickly and painlessly as possible, and move on to a better tenant.

AVOID Courtney Grayson and Tyler Jesse BAD TENANTS

*What do I do when the tenant doesn't pay?

*Landlord Rent Collection

Tenant Not Paying Rent? 4 Steps Landlords Should Take (Notices & Eviction)

Nonpayment of rent is obviously one of the biggest problems facing landlords. It always was and probably will continue to be. But for now, we can take steps to minimize losses when rent isn't paid.

Nonpayment of rent doesn't always mean the rent was not paid. A partial rent payment creates an unpaid portion. In many leases past due charges such as unpaid late fees are deemed payable as "added rent". Unpaid Added Rent is the same as unpaid Rent, valid grounds for eviction.

When rent is not paid on time, the landlord should be prepared to take action like an automated robot, to collect before too much time passes. Don't be strung along by the tenant waiting for some windfall that may never come.

1.- The Urgent Late Notice includes many features: Late Rent Notice - Be prompt in issuing your tenant a late notice when the rent is not paid by the end of the rent grace period. (That is the date rent becomes late - in my lease it is after the 5th day after due date). I always recommend using a late notice that informs the tenant of late fees. (As long as your lease provides for late fees) I also think it's a good idea to let the tenant know that you or your management company operate on a schedule and the clock is always ticking each month.

2.- Phone call- If after you haven't received the rent or a response from the tenant within a reasonable time (2-4 days after sending/delivering the Late Notice), give the tenant a call to find out what is wrong. This can be done before the late notice is sent if you like. Give the tenant a "heads up" that the late fees can build daily. Also inform the tenant that on ____, 20__ the account automatically goes to the attorney's office for eviction procedings plus the attorneys fee will be added to the balance owed (if your lease provides for attorney fees like mine does.)

3.- Eviction Notice / Attorneys Letter - I prefer to send an attorney's warning letter (optional) instructing the tenant to pay all rent and late fees before actually commencing eviction in court. (Ask your attorney to prepare a warning letter for pre-eviction situations.) I send it along with a Notice to Pay Rent or Quit, Demand for Payment. I also warn the tenants in the notice that we are about to make a negative impact on their credit record. 

Compound Interest 101: How Compound Growth Builds Wealth

You can skip this section if you’re already familiar with compound interest and how it works. I’m including it for people new to the idea. Let’s say you have access to a savings account that pays 5% interest. You decide to put $1,000 and let it sit for future emergencies. For easy math, we’ll say it compounds annually (meaning you only figure up the interest on it once a year). At the end of the first year, that account has $1,050 in it. You have your original $1,000, plus you have 5% interest on it – $50. At the end of the second year, the account now has $1,102.50 in it. You have the $1,050 you had in it after the first year, but this year it earned more interest – $52.50.

Why? The interest earned during the first year is now itself earning interest. You didn’t just earn interest on the first $1,000. You also earned it on the $50 in interest from the first year – an extra $2.50. At the end of the third year, the account now has $1,157.63 in it. You have the $1,102.50 from the end of the second year, but this year it earned $55.13 in interest. Now, from the first year to the second year, your interest grew from $50 to $52.50 – an increase of $2.50. From the second year to the third year, your interest actually grew even more – jumping from $52.50 to $55.13 is a $2.63 increase in interest. Not only is the amount of interest growing from year to year, the amount that it grows each year is actually increasing.At the five year mark, you’d have $1,276.28 in the account. At the ten year mark, you’d have $1,628.90 in the account. At the twenty year mark, you’d have $2,653.30 in the account. Your money has more than doubled without you lifting a finger, and every single year, the money has grown more than it did the year before. That’s the power of compound interest. It’s not impressive at first, but if you stick with it, it becomes a locomotive.

Compound Interest Is Great, But There’s a Catch

Should You Pay Off Your Mortgage Early? 12 Pros & Cons

Do I think it’s wise for you to pay off your mortgage early?

You may as well ask me if I think it is a good idea if you paint your living room sage green.I used to think paying off your mortgage was an absolute no-brainer.

Then I did a complete 180, changing direction like one of those day-glo orange heliport windsocks. Oh yes, I did.

Suddenly it just didn’t seem like it made much sense to pay down a 30-year $120,000 mortgage at 4.5% interest if I truly believed that high-inflation was inevitable down the road as a result of Fed’s relentlessly lax monetary policy and the current administration’s plans to greatly expand the size of the Federal government and its entitlement programs.

The question of whether or not I think you should pay off your mortgage is not as cut-and-dried as, say, whether or not I think you should pay off your credit card balances in full each month. Of course you should pay off your credit cards in full each month; but when it comes to paying off the mortgage early, there are solid arguments that can be made either way.

Here are 12 good reasons why you should — and should not — pay off your mortgage early. Which ones resonate most with you?

Good Reasons Why You SHOULDN’T Pay Off Your Mortgage Early

1. You haven’t capitalized on your employer’s company match to your workplace retirement plan.

If, for example, your employer matches you dollar-for-dollar on the first 3% of your contributions to your 401(k) plan, then you’re throwing away free money. If he matches even half that amount, then you’re still passing on a sure-fire 50% return on your money. Opportunities like that don’t come up too often. Take advantage of them when you can.

2. You have other debt that accrues at a higher interest rate than your home loan.

It makes no sense to pay off a mortgage if you’re carrying credit card debt at a higher interest rate. When you pay off a credit card with a 15% interest rate, for example, then every dollar of debt you pay off earns you an instant 15% return. Not too shabby.

3. You have yet to establish an emergency fund equal to at least three months of living expenses.

It doesn’t make much sense to be making extra payments on your mortgage if you can’t withstand a sudden loss of income due to unemployment, or suffer a major financial expense that forces you to choose between paying the mortgage or, for example, having a major car repair made.

4. You want to maintain more liquidity/flexibility.

Many people like to have a ready source of funds that can be easily converted to cash in order to quickly react to business opportunities, for example.

5. You owe significantly more on your house than it is currently worth.

If your mortgage is upside down, the fact is you are more susceptible to foreclosure if you lose your job or suffer some other hardship that prevents you from making your payments.

6. You have a family but haven’t yet established life, health and disability insurance.

If you are the lone bread-winner in the household, how will the mortgage be paid if you die, suffer a catastrophic health problem, or become severely disabled?

7. You have a low fixed-rate loan and anticipate a bout of severe inflation.

Inflation is a debtor’s best friend.  If you have a fixed rate mortgage with a very high balance, you might even want to root for high inflation. That’s because inflation erodes the value of money, and when inflation is on the rise the value of your mortgage debt becomes less over time.  For those who have fixed rate mortgages, the higher the inflation, the faster the value of that debt is reduced. Many people ask why they should pay off a fixed rate loan with more expensive dollars today if they strongly suspect those dollars will be worth significantly less within, say, the next five years or so.

8. You are confident you can get better returns elsewhere.

Let’s say you have a mortgage with an interest rate of 5%.  But in reality your effective, after-tax interest rate on your loan is less than that. If you’re paying, say, 25% of your household income to federal and state tax collectors, then your effective interest rate is 25% (your tax rate) less than the original 5% — or only 3.75%. After determining your effective interest rate, you may decide the bar is low enough that you’d rather try earning a bigger return elsewhere.

Good Reasons Why You SHOULD Pay Off Your Mortgage Early

1. You’re the type that believes peace of mind is priceless.

How do you sleep at night?  I know more than a few people with paid-off mortgages that swear they sleep like a baby every single time their head hits the pillow.

2. You want to remove the cost of your mortgage from your future living expenses before you retire.

What better way to temper the impacts of living on a fixed income than by making sure your mortgage is paid off before you retire?

3. You’re more concerned with getting a steady guaranteed return than risking a bigger payday through the stock market or other investment opportunities.

As far as Suze Orman is concerned, it makes more sense to pay off your home before making investments anywhere else. Says Orman: “You cannot live in a tax return. You cannot live in a stock certificate. You live in your home.”

4. You simply hate the idea of paying interest.

People who have the best grip on their personal finances naturally abhor paying interest. Personally, I hate paying interest. To anybody. For anything. But that’s just me.

So Is Paying Off Your Mortgage Early A Good Idea?

Well, that depends. In the end, the “correct” answer really comes down to which reasons are most important to you.

Don’t let anybody tell you otherwise.