Pick the right tenants

It does not matter which legal entity to use and hide behind. The most important thing to do is to eradicate the liability in the bud by picking the right tenant and treat them like business clients. As a landord of almost 9 years, this is the lesson I learned. Do not get emotion mixed up in renting, a business transaction. When I first listed a small house in a good school district for rent, I received so many phone calls and a large crowd at open house. A Korean visiting scholar with a wife and two young kids begged me to rent to him. That tiny house, less than 800 sf, is best for a single person or a young couple, not for this many people. But he begged and begged and my heart softened, remembering how hard it was for me to find a place to live when I first arrived in America. Good intentions, but bad consequences. Less than 8 months into the lease, he got university housing and wanted to move. I had to let him go and started looking for new tenants again. No problem to rent it again, but this turn-over was really unnecessary. Be picky and do not rent to the first candidate who shows up. In a slow rental market, it is still important to be picky. Sometimes we get worried when the rental does not have lots of people interested. We count the rentless days and hope someone would rent it. Do not pick anyone that comes along. I learned it the hard way. It is much easier to get the bad appled in than get them out. It is better to leave the place empty than getting someone who will destroy the place. If you buy an existing rental, you do not have a chance to pick good tenants and have to inherit problem tenants. Be firm and set the rules. You are the landlord (the boss), not the other way round. If the tenants are late in rents, accept the late payment first time with a reminder. Second time late, send a 3-day pay or quit notice. Still late, file eviction paper. On the other hand, be fair. Whenever tenants call for repairs, I always have them fixed right away. Treat tenants as my business clients and make them happy so they can pay rent without delay.

Buy a couple of Nolo self-help legal books on being a landlord. I bought one and figured out how to do the eviction myself.