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Pocono Tenant Evictions on the Rise. Here are some possible ways Landlords can avoid the pitfall...

First off, we are not attorneys and this Blog should in no way be construed as legal advice. This information is based on experience, firsthand observation and our expressed opinions are based on both.

There are several reasons for the ever increasing number of Landlord / Tenant complaints that are being filed in the Monroe and Pike County Court Systems. The trend started in 2008 and has increased steadily ever since.  The most obvious reason for the increase  is the overall surplus in both supply (the number of available rentals) and demand (the number of potential tenants). In 2009 the Pocono Mountain Association of Realtors (PMAR) made a conscious decision to include “Rentals” as part of it’s Multiple Listing Service (MLS).

For the first time ever, Pocono Landlords could list their rental homes through a Licensed Real Estate Agent who could now put it on the MLS. What started off as just a trickle of availability at the start of 2009 with only a handful of homes to list has now grown to just under 300 homes available for rent at any given time of year. (PMAR/MLS data as of Aug. 2012). In 2011 alone there were 812 homes rented through our local MLS.  Rental Prices ranged from $3500 a month for a mini mansion in East Stroudsburg to as little as $395 a month for an efficiency studio in Cresco.
Here is how the 812 homes rented monthly throughout 2011…

Jan.  48 Homes Rented
Feb  56 Homes Rented
Mar. 81 Homes Rented
Apr.  75 Homes Rented
May. 54 Homes Rented
Jun.  83 Homes Rented
Jul.   60 Homes Rented
Aug. 75 Homes Rented
Sep. 77 Homes Rented
Oct. 66 Homes Rented
Nov. 68 Homes Rented
Dec. 69 Homes Rented

Note: We love looking at the numbers and if you would like any historical statistics from our market place (Monroe,Pike or Carbon Counties) please feel free to shoot us an email with your request and we’ll be happy to email you the data. Note that the numbers during the Holidays were very strong. In fact, the second half of the year’s numbers (July-Dec) were stronger than the first half. 
Keep in mind that these numbers do not include homes that were rented privately by owners.
This brings us to our next point. At least once a week Sandra and I are contacted by a Landlord who is at his or her wit’s end. Here is the usual scenario… Husband and wife make a joint decision to put their Pocono vacation home up for rent. After all, the kids are grown, they are not using it as frequently as they would like to, cost of electricity, propane and water have increased significantly. Maintenance, although infrequent is a major concern especially after a major concern. What was once a fun place to come once or twice a month has now turned into an empty financial burden. Because they can’t sell the home for more than what they purchased it for they make the decision to rent the house out.  They start by posting an ad on Craigslist. They immediately get multiple inquiries and are excited. They speak to a few people on the phone and make an emotional decision to rent the house out to a couple that may or may not be qualified to rent the home. Several months later the tenants stop paying and stop communicating. The owners threaten to take them to court if payment is not received shortly, the tenants give a sob story and the Landlords give them more time. This continues for several weeks, sometime months with no resolution. Its at that point we receive a phone call from exasperated Landlords looking for help.

Here are a few (six) simple steps to avoid this pitfall.

1. Start off by becoming a “Represented Owner”. What do we mean by this? Hire a Property Manager who is also a licensed Real Estate agent and have them represent your interest, explain your policies and manage your expectations as an Owner/Landlord to the general public and to potential tenants.

2. Listen to your Property Manager’s advice regarding repairs and price. An experienced Property Manager knows what “Good Tenants” are looking for in a rental property. Your property Manager will also know how to price your home accordingly so that it is not sitting too long on the market due to overpricing and will see to it that your not giving it away (under-pricing). When choosing a manager be sure that they are well connected. It is important that the property manager you chose has a good support staff as well as contractors on standby to address home repair issues that could arise at any moment. We can’t tell you how many times we have received calls on a Sunday after-noon about a hot-water heater issue or a broken furnace.

3. Make sure your house represents you and your expectations. If your house is in disrepair tenants will assume that you don’t care about your home tenants will in turn treat it in the same manner and not care for it either. In addition, you may be selling yourself short and losing money annually. Here is an example and a common mistake we see MANY Landlords make. For whatever reason Landlords think it wise not to spend $120 to get the carpets steam cleaned and often neglect or are hesitant to paint certain rooms. Okay, let’s break down the numbers. I want to make it painfully clear why this a defeatist attitude.
Here is the scenario…
Home Owner A has a home that is in great condition and hits the market priced at $1250/month. It attracts a lot of attention and after little negotiating rents in under 30 days for $1200/month. Owner(s) gross $14,400.00 annually.

Home Owner B has a similar home and is also asking $1250/month. Due to it needing some of the items previously mentioned like paint and carpet cleaning it does not show as well, receives tons of negative feedback, sits vacant for 3 months and finally attracts a less than ideal tenant and rents for a paltry $1050 a month. Home owner B loses 2 months worth of rent ($2100) and grosses $12,600 annually. Not including the 2 additional months lost on the market ($2100) this is a deficit of $1800 annually.
Over 2 years this is a potential loss of over $3600 for what amounts to $1000 or less in upkeep (painting $800 and carpet cleaning $200) at the start.
Step # 4 in avoiding painful property rental pitfalls...Keep your emotions out of it. Too often owner’s decisions are based off feelings and emotion.
Another benefit to hiring a Property Manager is simply this…as managers our decisions are based off fact, instinct and sound business protocol. I hate to sound blunt but we really don’t care if your tenant’s car broke down and they couldn’t make it to the bank to deposit the rent. It was due on the 1st and we afforded them a 5 day grace period. What happened during the other 4 days that they could have made it to the bank or to our office for that matter?
Sorry, but our contractual obligation to our Landlords is to collect a late fee when rent is late regardless of the reason. It is at this point that we use the following phrase followed up by an email and a certefied letter that reads “Please include your late fee from August with September’s rent”.

5. Screening... There is no better way to assure you get a “good” tenant that remains in good standing throughout the lease term than to have them thoroughly screened. In the same breath there is nothing worse than letting non-screened or poorly screened tenants in your home.
Here are a few Tenant Screening myths that we have discovered. Credit is everything and is the most important factor in determining who is going to be a good candidate to rent your home. This is simply not true. Although credit is important it is not the “be all and end all”. Experience has taught us that job stability and household income are equally important and combined they actually trump credit score. Remember one simple fact, “good credit” does not pay your rent “good income does”.
Some of the techniques that we currently use in our screening process have been modified / customized by trial and error throughout the years.
For instance, a few years ago we learned the value of making sure that the Landlord indicated on the application in fact matches the Landlord in the local courthouse tax records. Our database affords us the ability to pull up residential information on 90+% of the residential homes in the area.
You would be surprised how many times prospective applicants have lied about their current Landlord. I’m confident through our screening we have caught 100% of them.

6. Eviction This brings us full circle back to the start of this blog. Inevitably, despite screening efforts there are times when the “Eviction Process” must be initiated.
From a tenants perspective, I would imagine that it is never easy to call your landlord to inform them that you will be late with the rent. Conversely, as a Landlord, I would imagine that it is never easy hearing your tenant is going to be late. Furthermore, what do you say to a tenant that has just told you this? Would you know what to do or say next? Would you know what to send them in the mail, or post on their door? The biggest pitfall that landlords fall into when they get this call is that they do nothing mentioned. They send nothing, they post nothing and they commit the tenant to “nothing”. What a “true” property manager does is different. First we listen to the story then we commit the tenant to a viable repayment agreement and have them and you (the landlord) sign to it. This “repayment agreement” will come in handy in the event we have to go before a District Court Judge/Magistrate. The second most important thing and the action that most Landlords act on way too late is the posting of the Notice to Quit. Our Team Pocono Property Management Policy is what we call a “Day 6 policy”. If a Tenant has not paid rent by midnight on the 5th day of of the month they can expect a 10 Day Notice to Quit on their door by that evening. Its just that simple. With or without an excuse it is what we are contracted to do. We have a zero tolerance policy when it comes to this notice. Far too often this simple step is ignored by Landlords and the resulting delay can be costly.

So there you have it, 6 Simple steps to ensure a smooth and relatively event-less rental experiance.

For more information on our screening policy feel free to call us directly at…(570)972-1777

For more information on our Pocono Property Management Services feel free to visit our site at www.TeamPocono.com

Again, if you’re in need of statistical data including CMA’s please don’t hesitate to contact us. Simply send an email to TeamPocono@gmail.com with your requests.

Published Monday, August 20, 2012 11:32 AM by Ron & Sandra Bailey


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