A post-occupancy agreement, also known as a post-closing possession agreement, allows the seller to remain in the property they just sold to the buyer for a set period after closing. This can be a win-win for both parties in some situations, but it comes with major risks for the buyers. I have personally bought many houses with post-occupancy agreements and some worked out great while others ended in a costly eviction. A post-occupancy agreement may be needed in some cases but as a regular home buyer, I would be very careful ever accepting one.
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What is a post-occupancy agreement?
In a typical home sale transaction, the seller and buyer agree to a closing date and time, and possession of the home transfers when that closing takes place. The sellers bring the keys and hand them to the buyers if they are both at closing. Or the buyers can pick up the keys or their agent can give them the keys if both parties are not at the closing table (my preference).
In some cases, a seller may want extra time to move out after closing. They may be waiting for their new house to close, or for a house to be built, or they might just want more time to move. This sounds like a reasonable request for the seller but it can come with major risks for the buyer. This is why I try to avoid post-occupancy agreements if possible.
The video below was a nightmare after a post-occupancy agreement went bad:
What are the risks of a post-occupancy agreement?
Many people have heard the stories on the news of a seller who will not move out of their home are they sell. Almost all of these situations come from post-occupancy agreements. During a typical sale, the buyer does a walk-through of the home to make sure it is clean, all the seller’s stuff is moved out, and the property is in the same condition as when they put a contract on it (unless the contract says otherwise). If there is anything wrong, the buyer can delay or even not buy the home.
When the seller is still living in the home and the buyer closes on it (completes the purchase), they cannot make sure it is clean, all the seller’s stuff is gone, or the seller is out. Some sellers want the money that is in their home but want to stay! If the seller does not leave after a post-occupancy agreement, the buyer cannot simply kick them out, they must go to court and evict them.
An eviction can take months or even years in some states like New York.
Why do I agree to post-occupancy agreements?
I am a real estate investor who works hard to get the best deals I can. I buy a lot of distressed properties that need work and many sellers have unique situations. I also buy from many wholesalers who make deals with sellers that I must agree to. In a perfect world, I would never do a post-occupancy agreement but in some cases, it is a take-it-or-leave-it situation and the deal is good enough for me to take the risk.
I would estimate I have some kind of problem with 30 percent of the post-occupancy agreements I do. For me, it is not as big of a problem as it can be for inexperienced homeowners or people who need to move into the home. I also have a YouTube channel that helps me recoup some of my losses with the crazy situations that occur. I also know how to handle evictions, squatters, and other situations where someone not as experienced could be completely lost on what to do.
How should a post-occupancy agreement be structured
There are also risks with how post-occupancy agreements are structured. Some people just agree to let the seller stay and maybe pay a little rent. The problem with this is there is no motivation for them to move out. When we do a post-occupancy agreement we try to make it painful if the seller does not hold up to their obligations and move.
The post-occupancy agreement should always be in writing and money should be held back in escrow from the seller proceeds. I like to hold back at least $10,000 on houses below $400k and if they do not move by a certain date, I get that $10,000 as the buyer. That may seem like a lot but an eviction and a few months of house payments can eat through that very fast. If you are buying a more expensive home, I would hold back much more.
I have seen many agreements that can be wishy-washy and not work out for either party. Some will charge a per diem if the seller does not move like $200 a day. It can be confusing when they are officially out, and when the dates officially start and proving when they are out. I have seen some people create a lease with rent charged and a deposit. You have to be very careful with this as many states have laws on how much the deposit can be compared to rent, how a deposit is paid back or kept, and the rights of the tenant after the lease is started. It is usually easier to evict a seller who does not move than a tenant with a lease.
Another crazy situation:
Should you agree to a post-occupancy agreement?
If you are a regular home buyer looking for a place to move into, be very careful agreeing to a post-occupancy agreement. I would make sure you love that house and have no other options. If you do agree, make sure there is a large enough penalty to make it worthwhile to you if the seller does not move. You also need to make sure your insurance is set up correctly, there is an agreement for who pays for utilities and there is recourse if the house is damaged during the extra time the seller lives there. It also helps if you have a YouTube channel where you can post crazy stories if something goes bad.
Conclusion
I am okay doing post-occupancy agreements if everything is set up correctly and that is my only option. But even as an experienced investor, I try to avoid them if at all possible. If you happen to live in a state with long eviction timelines I would be really careful agreeing to any post-occupancy agreement.
We have all seen horror stories on the news or social media when a squatter moves into a vacant house or rental property and the unlucky owners cannot get rid of them. That happened to me and it was not a fun time. Luckily it provided some great content for my YouTube channel which helped offset the cost of those squatters. I was also fortunate that I did not have to deal with the squatters for years or even more than 6 months as many people do. How long it takes to get rid of squatters can depend on the state, county, or town you reside in. While I was able to get rid of the squatters, I could have done a few things differently that may have forced them out sooner.
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How did I get squatters?
I own an 8-unit apartment building that I call the Ocho. I bought this property a couple of years ago and it came with some tenants who were not amazing. One of those tenants had been behind on rent a few times and caused some other issues so we decided not to renew their lease. That tenant said they were planning to move out of state so it worked out for everyone, or so we thought.
Below is the actual eviction
We gave them notice and about 20 days later they said they would be out and would drop off the keys. Those keys never showed up. We called a few times and we got the same story. They were almost done moving out and would have keys to us soon. The keys never showed up and then the story from the tenant changed. They said they were all moved out but their sister was at the house cleaning for a day. She claimed the sister would drop off the keys soon. I knew this story was not going to end well.
I stopped by the property and talked to the “sister” who was at the property. There was also another lady and maybe more people in the apartment and they did not look like they were cleaning. They said they would be out the next day and would drop off the keys. Big surprise they did not show up so I stopped by the apartment again to see what was going on and I got the same story. Luckily we had already posted a stay or quit notice when the first tenant had said they were bringing keys and never did because they never paid rent for the next month after they were supposed to have moved.
I knew the sister was not going to leave but evictions are expensive and we try to avoid them. I told her I would pay her $200 if she could be out by the end of the week. She agreed and said she would be out and get us the keys. That day came and she said she was out so I stopped by the property. To my surprise, she was out! However, there were at least three new people in the apartment who I had never seen before.
I was hesitant to talk to them because they did not look like they wanted to talk to me but I really wanted them out. I walked over and one of them came out of the apartment. He claimed to be the ex-boyfriend of the original tenant and said the “sister” was his sister and not related to the tenant. He claimed he had moved in because he used to live here with the original tenant and the electric bill was in his name. However, he was never on the lease and we had never seen him or talked to him before. He also showed me a massive cut on his arm he said he got from being stabbed recently but decided he didn’t need to go to the hospital so he taped it shut.
I told him he couldn’t stay and he needed to leave. He gave me all kinds of stories like he approved to get rent money from COVID funds, he said he talked to my office and they said he could stay, and he said his ex said he could be there. None of these stories checked out. I even called the ex who he claimed told him he could stay and asked her about it. She confirmed no one should be there and one reason she is moving out of state is this guy. Some other people came out of the apartment and said they would start paying rent too and had jobs but they hadn’t been paid yet. Even if they had money, I would never take it as that could constitute a lease!
It was clear they were not going to leave. Unfortunately, while I was talking to them the server for the eviction came by and posted the notice that said they had another ten days until the court date for the eviction. They all thought that meant they could stay! I thought about calling the cops and I should have even though they may not have done anything in this situation. Technically they were trespassing but they also had the keys and cops tend to try to stay out of these situations.
I decided to leave and pursue the eviction since it was coming up.
The eviction hearing
I always use an attorney to handle all of my evictions because I have tried it on my own and I never fill out the paperwork right and it costs me more time and money than an attorney would have cost me. I let my attorney take care of it and waited for him to tell me when the eviction date would be. I got a call from the attorney and he said the eviction was not granted! I could not believe it. He said the squatters showed up to the hearing which was a Zoom call because of covid and the judge granted them a 30-day extension because “they had nowhere to go”.
Looking back on this I should have gone to the hearing. I do not know if it would have helped but I could have told the story and what happened and maybe the judge would not have made that decision. As it was, I now had to wait 30 days or hope they moved out which they were not going to do. I drove by all the time and saw more people in and around the unit. I wanted them out so bad, not just because I feared they were destroying the place but because of the other tenants in the building as well.
Another eviction hearing
I showed up to the next hearing and my attorney and I waited for the judge who hopped on the Zoom call about 10 minutes late. The squatters were not on the call. The judge made us wait another 15 minutes for them to show and he seemed disappointed that they never did. He finally ruled the eviction would proceed since they did not show up. We finally got the eviction scheduled with the sheriff for three weeks out.
Time drug on for what seemed like forever and the eviction day finally came. I showed up with my crew because Colorado requires ten people to be there so they can move everything out in an hour. The sheriff’s deputies serve the notice and make sure everyone is safe. I know the deputies and they are really cool. I could not tell if the squatters were still there but I would think they wouldn’t be because I was guessing they didn’t want any contact with law enforcement.
I was wrong! They were still there and it took them 15 minutes to answer the door. The deputies talked to them and they had not moved anything out. We all decided to give them 10 minutes to move what they could and then we would move the rest. I got in the property and it was dirty but thankfully not destroyed. The tenants moved their stuff into their car and left. I never saw them again. The rest of the stuff we left in the yard for 24 hours per Colorado law and disposed of after that.
This could have been much worse based on what I see in other states but it was still frustrating waiting months for the eviction and not getting any rent.
Another squatter eviction we did:
How to get squatters out
There are a few things I could have done better and some things others can do to avoid long squatter situations as well.
If you have vacant properties check on them often! A vacant property is a target for squatters and vandalism.
If you see someone on your property who should not be there call the police immediately. The police may or may not do anything but you still need to try. Some squatters may not want police contact and may leave if they come. The police may say it’s a civil matter or not their problem but remind them it is trespassing and illegal. If you let squatters stay too long without reporting them it makes it much more difficult to get rid of them.
If there are squatters with no lease, create a document stating the people in the property have no lease and no permission to be in the property. Get this statement notarized and bring it with a copy of the Deed showing the true owner does not have any lease with the squatters in case the squatters provide a fake lease.
If you think something fishy is going on with your tenants, schedule an inspection. Most leases should have a clause that the landlord can inspect the property with notice. If they won’t let you in, that could be grounds for eviction.
If tenants are not paying or are supposed to leave and not leaving, start the eviction process as soon as possible.
In extreme situations, you can try offering cash for keys, or money for them to move. Never pay them before they are out and give you the keys.
Be careful accepting any money or rent as that could give them legal grounds to stay even if they do not have a formal lease.
If an eviction hearing is scheduled it doesn’t hurt to show up yourself to give insight into the situation. Just don’t lose your cool or make it worse.
Don’t do anything illegal like bring enforcers to physically remove people. Talk to an attorney and check state laws to make sure you don’t give the judge or squatters a reason to stay.
If you are in a really tricky situation with state laws and police who will not help, turn to social media or neighbors. Tell your story and the more attention you get, the more likely you can get your situation resolved. Again, stay within the law, stay calm, and don’t make it worse.
Be careful about rekeying properties or trying to force them out on your own.
Conclusion
A lot of people think that because they own the property they can do whatever they want, however, that is not the case. When you rent to someone or give them permission to be in the property they have gained rights to that property. If they live there they are in possession of the property and you cannot simply force them to move or rekey the property. Be sure to talk to a lawyer and check with state laws when you encounter a situation like this. Each state has different laws and eviction processes so just because you see someone else do it, doesn’t make it legal. I hope you never have to encounter a situation like this but if you do act fast and don’t give up!
I’ve been in the real estate world since 2002 as an investor, agent, broker, and even author. Real estate has changed over the years but I still love it and still invest today. Over the years, I have learned many things and evolved from trying to rent and screen tenants based on gut feelings to developing systems that work much better!
Being a landlord can be rewarding, but navigating the world of rentals also comes with its share of challenges. To be successful and avoid unnecessary headaches, it’s crucial to avoid these common pitfalls.
Table of Contents – Top 5 Mistakes Landlords Make
1. Skipping Thorough Tenant Screening
Rushing to fill a vacancy almost always backfires. A proper screening process, including checking references, credit reports, and employment history, helps identify responsible tenants who are likely to pay rent on time and respect your property. Gut feelings are not the best way to choose tenants, even if they are friends or family, especially if they are friends or family! Don’t rush to rent a place to the first people who apply because you don’t have the time. If you don’t have the time, you should not be the one leasing the property.
I use DoorLoop for all of my tenant applications and screening. It makes managing background checks very easy.
You can read more about how I screen for tenants.
2. Neglecting the Lease Agreement
A clear, detailed lease agreement is what protects you when a dispute arises, including evictions. If you don’t have a lease or the right lease, it can make eviction take much longer and cost much more money. We try to avoid evictions but that is not always possible even with proper screening.
It must outline expectations, responsibilities, and procedures for rent payment, repairs, maintenance, and dispute resolution. Vague agreements lead to confusion and potential legal issues.
Either get a lease from a local attorney or use a high-quality online legal document generation tool. I use Legaltemplates.com. Using a local real estate attorney will be helpful in case a dispute arises later.
See my tips for the best ways to manage rental properties.
3. Ignoring Maintenance Issues
Ignoring leaky faucets, malfunctioning appliances, or minor repairs can snowball into bigger problems down the line. Prompt maintenance not only keeps tenants happy but also prevents costly damage and potential legal action. You cannot rely on your tenants to tell you about every issue. It is also important to schedule regular inspections to see if there are any major issues in the property and that the tenants are taking care of it.
See my article on how to find contractors for house flips and rentals.
4. Setting Unrealistic Rent Prices
Overpricing your property can lead to long vacancies and lost income. Research fair market rents in your area and consider factors like amenities, location, and condition before setting a price. Remember that asking price for other rentals is not always the best way to gauge market value. Those properties could be for rent for months and overpriced. Pay attention to the market to see which ones are being rented and which ones are sitting.
Zillow provides fairly accurate rent estimates (rent is easier to estimate than value).
Once you have an idea of market rent, you can use my Rental Property Cash Flow Calculator to understand your financials.
5. Failing to Communicate Effectively
Communication is key to a healthy landlord-tenant relationship. Be professional, responsive, and address concerns promptly. Ignoring tenant issues or being dismissive can create frustration and escalate into bigger problems. Ignoring tenants can also get you in trouble with the city or county where you reside.
I don’t personally deal directly with issues. I instead chose a great property manager to ensure communication is open and issues are handled promptly. They typically charge a percentage fee, which I simply build into my expenses.
Read my article on how to find a great property manager.
Conclusion
By avoiding these common mistakes, you can create a positive rental experience for both yourself and your tenants, leading to a smoother, more profitable investment.
Portions of this article were drafted using an in-house natural language generation platform. The article was reviewed, fact-checked and edited by our editorial staff.
Key takeaways
Fannie Mae and Freddie Mac are government-sponsored enterprises that aim to provide the mortgage market with stability and affordability.
They are major players in the secondary mortgage market, buying loans from lenders and either keeping them or repackaging them as mortgage-backed securities.
Fannie Mae and Freddie Mac were both created by Congress but have different intended purposes and loan-sourcing methods.
As you explore your mortgage options, you’re likely to come across two names: Fannie Mae and Freddie Mac. Although you won’t directly get a home loan through these government-sponsored enterprises (GSEs) — private entities operating under a Congressional charter — they nonetheless have an impact on your getting a mortgage and its terms. Let’s take a closer look at these key players in the mortgage industry, and what distinguishes them.
What are Fannie Mae and Freddie Mac?
Fannie Mae and Freddie Mac are government-sponsored enterprises. Congress created both with the goal of adding stability and affordability to the country’s mortgage market. They also provide banks and mortgage companies with ready access to funds on reasonable terms, adding liquidity to the mortgage market.
Both agencies are major players in the secondary mortgage market. That is, their focus is buying loans from mortgage lenders, giving those institutions more capital to continue offering financing to other borrowers. Fannie Mae and Freddie Mac then either keep them or, more often, repackage them as mortgage-backed securities that can be sold to investors.
By acting as a market-maker — that is, constant buyer — they ensure liquidity in the lending world. As of 2023, Fannie Mae and Freddie Mac support around 70 percent of the mortgage market, according to the National Association of Realtors. That means the majority of conventional loans, those offered by private lenders, end up being backed or purchased by one of the two entities.
Though they set criteria for loans, neither Fannie Mae nor Freddie Mac originate or directly provide mortgages to homebuyers. Instead, you’ll get your loan from a mortgage lender, such as a bank, credit union or online lender, which can then choose to sell the loan to one of these GSEs, assuming the loan’s eligible.
Differences between Fannie Mae and Freddie Mac
While they may seem incredibly similar, Fannie Mae and Freddie Mac have some key differences. Here’s a closer look at what differentiates Freddie Mac from Fannie Mae.
Intended purpose
Fannie Mae was established with the intended purpose of creating a more reliable source of accessible funding for banks and mortgage companies. This, in turn, opened the door to more widely accessible and affordable mortgages for Americans seeking to become homeowners. Congress created Freddie Mac, on the other hand, with the goal of expanding the secondary mortgage market, buying loans that meet its standards from lenders. This function allows lenders to make more loans available to prospective buyers.
Loan sourcing
Although both do buy mortgages, each GSE purchases loans from different sources. In general, Fannie Mae tends to buy loans from larger commercial banks and mortgage lenders, whereas Freddie Mac often buys loans from smaller banks.
Lending requirements
Fannie Mae and Freddie Mac also have slightly different requirements for the mortgages they purchase. In both cases, Fannie and Freddie loans must be conforming loans, or adhere to these standards, for them to be eligible for purchase. The requirements cover the amount of the home purchase price that can be financed, the borrower’s credit score and debt-to-income (DTI) ratio, loan-to-value (LTV) ratio and other factors.
Loan programs
Fannie and Freddie each sponsor different loan programs — mortgage products that expand homeownership opportunities to buyers who may not be able to afford a conventional down payment. These include HFA loans offered through state housing finance agencies, as well as the HomeReady and HomePossible mortgage programs, offered through approved private lenders. Both empower buyers by requiring only a 3 percent down payment.
Similarities between Fannie Mae and Freddie Mac
Now that we’ve covered their differences, let’s touch on how Fannie Mae and Freddie Mac are similar.
Their creation and structure
Both Fannie Mae and Freddie Mac were created by Congress to address issues in the housing market. They exist as publicly-traded corporations that are under the conservatorship of the government.
Buy and sell mortgages
Fannie Mae and Freddie Mac buy loans from lenders and repackage them into mortgage-backed securities. This benefits the mortgage market in a couple of ways. First, it lowers the risk of default for lenders since they don’t have to keep these loans on their books. Plus, selling mortgage-backed securities to investors creates stability in the secondary mortgage market, further lowering risk and leading to lower interest for borrowers.
Increase loan availability
Because Fannie and Freddie buy loans from lenders, this increases the amount of money lenders can loan out. Once they close a loan and sell it to Fannie or Freddie, lenders can re-lend that cash.
Standardize loans
Fannie Mae and Freddie Mac only buy loans that conform to the FHFA’s standards. That means they must be under a certain loan limit and borrowers must meet specific financial requirements. Lenders have adopted these standards for most conventional conforming loans so they can sell their mortgages to Fannie and Freddie.
Fannie Mae and Freddie Mac history
In 1938, the government created Fannie Mae, or the Federal National Mortgage Association, amid the struggles of the Great Depression. The goal of Fannie Mae was to create a more reliable source of funding for banks, opening doors for more Americans to become homeowners, figuratively and literally.
Freddie Mac, short for the Federal Home Loan Mortgage Corporation, came on the scene through an act of Congress in 1970, with a similar purpose of ensuring that there are reliable, affordable mortgage funds available nationwide.
Since 2008, both Fannie Mae and Freddie Mac have operated under the conservatorship of the Federal Housing Finance Agency (FHFA). Though both are currently under a conservatorship of the same agency, the two entities are separate from one another, each with its own shareholders and leadership.
Fannie and Freddie in the 21st century
Both Fannie and Freddie played a role in the Great Recession. In the years leading up to the housing market collapse, they backed or owned numerous subprime mortgages. When the housing bubble burst, economic pressures and large losses led to the need for the government to step in and help them with bailouts. The two agencies took on more debt but, as a result of their losses, they risked becoming insolvent, and were put under FHFA conservatorship. They’ve since paid back most of the bailout money.
During the COVID-19 pandemic, Fannie Mae and Freddie Mac offered mortgage relief and protections to homeowners, including forbearance, loan modification programs and a moratorium on foreclosures and evictions.
Who regulates Fannie Mae and Freddie Mac?
Fannie Mae and Freddie Mac are regulated by two government agencies: the FHFA and the U.S. Department of Housing and Urban Development (HUD). Along with HUD and FHFA oversight, the President of the United States appoints five of the 18 board members at each entity. Further details of the regulation for Fannie Mae and Freddie Mac are laid out in two government acts: The Federal Nation Mortgage Association Charter Act and the Federal Home Loan Mortgage Corporation Corporation Act.
What this means for you
Since you can’t take out a mortgage directly from Fannie Mae or Freddie Mac, why should you care about these big names in the mortgage market? In addition to keeping the mortgage market humming and making homeownership more accessible overall, here’s how they can affect you:
They create more affordable financing options, including lower-down payment loan programs.
They foster competition among lenders, leading to lower rates.
They help set borrowing standards, influencing the qualifications you need to meet to obtain a mortgage.
To find out if you have a Fannie Mae- or Freddie Mac-backed loan:
Back in August 2020, the Aspen Institute analyzed U.S. Census data to calculate that without “swift intervention” there might be an estimated 30 to 40 million people in America at risk for eviction, with 29 to 43 percent of renter households at risk of eviction by the end of 2020.
Here we are in early 2021, and some “swift intervention” has arrived in the form of an extension of a Centers for Disease Control and Prevention nationwide ban on “certain residential evictions.” The CDC order, which defines a temporary halt to residential evictions to prevent the further spread of COVID-19, went into effect on Sept. 4 and was to end on Dec. 31, 2020. It’s now in effect until March 31.
Aside from any federal rules, many states have put their own eviction bans in place. The NOLO legal information website has a list of state eviction protections. Princeton University’s Eviction Lab monitors weekly reports through its Eviction Tracking System with nearly real-time updates on states’ moratoria. For more updates, check with a legal aid organization where you live.
All good news but cold comfort if you’re one of the people who has already been evicted. Although it’s never a good time to leave your place of residence, to have to do so during a global pandemic adds an extra layer of fear and uncertainty. Aside from health worries, how do you get an apartment with an eviction? What happens to your credit? Will you be able to rent again?
What are the reasons for an eviction?
The following are some reasons you might face eviction:
Behind in rent
Won’t leave the property after the lease is up
Violated the terms of the lease
Engaged in illegal activity
Damaged the property
What does an eviction mean?
Landlords have to follow a series of legal steps before they can put you out. They can’t just change the locks while you’re not home.
Usually, but depending on local laws, the landlord has 30 days to notify you in writing that they’re terminating your lease. They must attend a hearing and make a case for why you, the renter, need to leave. If the landlord wins the case, and you don’t leave or make changes — by paying the back rent, for example — they will then contact law enforcement and schedule an eviction date. A sheriff or marshal will give you notice that law enforcement will arrive a few days hence to escort you off the premises.
You can, of course, defend yourself against an eviction if you believe it’s wrongful — a landlord’s illegal activity, the property is uninhabitable, the landlord is retaliating against you for demanding repairs.
Will eviction affect your credit?
An eviction shows up on your legal record, which future landlords will be able to access, and remains there for seven years. The eviction will not show up on your credit report, but it may affect your credit in these ways:
Your landlord may have sent unpaid rent information to a collections agency
If your landlord sues you in court for unpaid rent and wins, you’ll have a civil judgment against you. That civil judgment will show up on your credit history.
You can petition the court to expunge the eviction from your legal record. You can then contact the credit reporting agencies to remove the civil judgment from your credit report. Getting rid of the collections agency from your credit report will be more difficult.
If unpaid rent was the reason for your eviction, do all you can to make amends with your previous landlord or the collections agency. That includes paying back what you owe.
What steps can you take to rent again?
You may have trouble finding apartments that accept evictions. For one thing, many property owners require a background check, but it’s possible to find some private owners who ask only for reference letters or apartments with eviction forgiveness. So, check upfront about how they will vet you.
While you’re looking for an apartment that accepts evictions, spend time rebuilding your own personal portfolio to show future landlords you’re worth any perceived risk:
1. Rebuild your credit
If you were delinquent in rent and got backed up on other bills, you’ll have dings on your credit report. You may want to engage a credit counselor to help in consolidating debt and creating a debt-management plan. (Check the Federal Trade Commission website for information on credit counselors.)
Ultimately, you’ll need to make a commitment — and stick to it — to pay all bills on time every time. Reduce your credit card balances and don’t apply for new credit cards. Keep in mind, rebuilding your credit will take time.
2. Write a letter of credit
You’ve got to convince a new landlord that you’re creditworthy. Be transparent and honest about your credit history and let a prospective landlord know that you’ve learned from past mistakes and will move forward responsibly.
You can do this by phone or by writing a letter in which you explain your circumstances. Offer details about how those have changed, e.g. you now have a higher paying job and define how you’re working to rebuild your credit. Back up your claims with pay stubs and reference letters.
3. Have references ready
Perhaps you have previous rental experience in which you were never late on payments. Get that landlord to write a letter attesting to that. You can also get employers, business partners, family and friends to write letters on your behalf.
4. Sweeten the deal
If you can afford it, offer to pay upfront more than what might be asked of you. Perhaps you can swing first and last month’s rent. Or, offer to pay a higher security deposit. Have a co-signer ready to help back your lease agreement. This makes you less of a risk.
You can find apartments that accept evictions
You want to make a good impression when you meet a prospective landlord to make your case. Dress neatly, stay calm, be honest and focus on your positive attributes. Although it might seem like it, an eviction is not the end of the world. Stay positive and spend time researching and preparing for how to get an apartment with an eviction.
Stacey Freed is an award-winning writer and former senior editor for Remodeling, a trade publication focused on the business of the remodeling and construction industry. As an independent writer, she continues to write about the building, design, architecture and housing industries. Her work has appeared in Better Homes and Gardens and USA Today special interest publications, Realtor magazine, This Old House, Professional Builder and online at AARP, Forbes.com, House Logic and Sweeten.com among other places.
Every year, I set goals and review my goals from the previous year. Not only do I set goals and review them but I publish them here for the world to see! This helps keep me accountable for my actions and keeps the goals fresh in my mind.
When I set goals, my main objective is not to achieve those goals but to do better. Many of my goals I do not achieve and that is okay because I know I did more and better with the goals than if I did not have them.
My previous goals and how I did
It is crazy to think of how much I have accomplished over the years and I know that setting goals helped me do much more than I ever thought possible. I own more than $22 million worth of real estate and have accomplished many of my dreams. I still have a long way to go and I will keep this going as long as I can. Every year I write this article that goes over my previous goals and my future goals. You can see those other goal articles from previous years below:
Things have changed over the years as my business has changed and new things have come into my life. I started a real estate brokerage, started investing in commercial real estate, wrote many books, started brick-and-mortar businesses, and much more.
What were my goals for 2023?
I don’t make the same goals every year because not every goal works. Some goals may seem like great ideas until I realize achieving them was too easy or not impactful on me or my business. Some goals may be too difficult to measure or track and some are just oo boring. These were my goals for 2023
Sell 20 properties
I usually make a goal to flip a certain amount of homes which means I sell a flip. I felt the need to bring a goal like that back since I need to be selling properties fairly quickly to keep my business model sustainable since I am buying new ones and spending a lot on repairs. I did not sell as many properties in 2022 as I usually do. These may be rentals or flips that I sell in 2023. I have sold rentals in the past that were not the best performing and that is my plan now as well. I have had some properties that I had big plans for but those plans fell through for various reasons. I need to sell those and move on to other properties while keeping the good ones.
I believe I only sold 10 properties in 2023! This was way below my goal and a few things made this difficult. For one, I was not able to buy as many flips as I hoped to. Rising interest rates also made it more difficult to sell some of the multifamily flips that I had planned to sell. This was not the end of the world because I am making money on those properties every month but I do have a lot of capital tied up in them that I would like to get out eventually.
Here is one of the properties I sold:
Buy 12 Flips
I think we only bought 6 flips in 2022! That was the fewest number of flips I have bought in many years but that number is also a little deceiving. Some of the flips I bought were multiunit properties that will take more work than a normal flip and some of the properties that I considered to be rental property purchases in 2022 may end up being long-term flips too. I have a few duplexes and triplexes that I was thinking of keeping or selling and I think I may sell them after fixing them up a bit.
I did not buy 12 flips in 2023 either! We only bought 7 flips which was not much better than 2022. The silver lining of this is that most of the flips we bought we in the last half of 2023 so we may see some light at the end of the tunnel for finding more deals. The lack of inventory has made it very hard to find properties that will be a worthwhile flip.
Here is one of the flips I bought:
Buy $2,000,000 worth of rental properties
I have had goals to buy a certain amount of rentals (my goal to purchase 100 rentals) and to buy a certain amount of square footage of rentals (my goal to purchase 1 million square feet of rentals) but this year I am changing it to a dollar amount. I liked both goals but they both had issues. The 100 property goal was for houses I started buying large commercial properties. The 1 million square feet of rentals goal was cool but then I bought some crazy big properties that were mostly money pits. We will see how this goal goes.
I did absolutely horrible with this goal as well! I only bought one rental property and it was a small one and a business too. The small laundromat in Kersey Colorado had an apartment in it and that is the only rental I was able to -purchase for $300k. I did have another property that I almost bought for $1.3 million but the seller backed out at the last second. Even though the market for selling rentals is not very good, there still are not many deals out there to buy either!
Refinance $2 million worth of debt
This is one goal that I have been accomplishing and makes a huge difference in my finances. By refinancing private money into bank money, I free up those private money lenders to lend me more private money and reduce my interest payments while locking in loans for the long term. I have some new lenders to try this year and I can reach out to my old ones as well on a few properties.
Well, this is another goal that I completely missed. I had some ideas to refinance properties but those ideas fell through. I knew it would be tough refinancing properties with traditional bank loans and I was hoping to use some DSCR loans. The issue I ran into with DSCR loans, is that most of them have huge prepayment penalties and it is very hard to find them on commercial or mixed-use properties.
Make $500k in revenue from Investfourmore
I have this same goal again! I have some new things to try and I may really focus on that business this year myself as well. I think there is a lot of opportunity there that I have not been fully tapping into. I would love to have people in my office who work on this business.
Are you getting used to me missing my goals because it happened again! I actually saw a decrease in revenue from investfourmore. Investfourmore is this blog, my YouTube channel, social media, real estate coaching products, and a few other things. One of the big problems with Investfourmore is that real estate is really hard right now and I think many people have lost interest or given up. While my revenue did not go up, I was able to accomplish some great things in 2023 with my brand.
Add 250k social media followers
I think this goal is diable and at the same time challenging as well. The tricky part with social media is you never know what will do well or how your account will do. Some things I think will never do well end up being awesome and some that I think are awesome do horrible! One of the sub-goals in this is to hit 100k subscribers on YouTube. I have 90k now and gained 10k in the last 2 months but without crazy evictions, YouTube stops pushing my channel as much and that crazy run is over for now. Hopefully, I can get more steady and consistent growth without craziness.
Here is a goal that I was much more successful at achieving. I hit 100k Subscribers on YouTube! I did not add 250k social media followers, but I added about 100k through YouTube, Facebook, and TikTok. Instagram has actually been losing followers because I think Instagram shadow banned me and hates me. I am not sure why.
Raise Revenues at my store from $65k to $95k per month
I bought a liquor store and mini-market in 2022 which was a goal of mine for a while. I have always wanted a brick-and-mortar store for some reason. I got my wish and it has been fun but also challenging. The store makes money even after paying rent to myself who owns the building as well. While it makes money, I think it can do so much better! One big change is we can serve more food options since I just upped our food license to a grocery with a deli which allows us to prepare some foods. We will see how that goes!
This goal I hit in the summer of 2023 and then sales dropped back down again. Sales are seasonal at the store and that was to be expected. While sales were way up, our profits were not as much as they should have been due to some staffing issues and cost problems. Making money is not all about revenue, but the bottom line, or profit as well. The store is going great.
Interesting 2023 accomplishments that weren’t goals
While I did not accomplish many of my goals I was able to do some new things I was not expecting. I have wanted a laundromat for many years and tried to build one from scratch in a small town in Northern Colorado. That did not work out because of the build and utility costs. However, I was able to buy one small laundromat and car wash in June that was already existing and then I took over another laundromat in September! The small laundromat has had many challenges but the larger one is doing pretty well. It was very exciting learning the business and trying to improve sales.
My goals for 2024
As always I am going to change up how I do my goals this year. I am always tweaking and changing things as I said previously. I am going to do something new which maybe I should have done before but for some reason, I did not. I am going to post an income goal. I have always been about investing and revenue in some of my businesses but I have never done a total income goal. Many people think I make way more money than I do.
I want to make one million dollars in taxable income in 2024
I have multiple companies that have made close to or more than one million dollars in revenue a year but taxable income is not revenue! If I am able to make one million dollars in taxable income it will mean that I brought in way more income than that because my rentals and other businesses provide a tremendous amount of writeoffs and deductions. I plan to do this with a mix of online profit, store profit, flip profit, rental property profit, and laundromat profits. I broke down that goal into smaller goals like making $100k profit at the store.
I want to sell 20 properties in 2024
I am repeating this goal again because there are about 5 rentals I would like to sell that are underperforming or have a lot of equity compared to the cash flow coming in. I also have 7 flips that should sell in 2024 and I plan to buy more that will sell in 2024 as well. It is not the end of the world if I do not sell this many but it would be nice and free up capital to buy properties with more potential or value-added possibilities if I can find them!
Here is one of the properties I sold in 2023:
I want to buy at least 12 flips in 2024
I made this goal in 2023 and did not reach it either but I think I can in 2024 or at least come close. It is fun doing flips and I love creating videos and buying more flips allows me to make more videos! I am hoping with interest rates going down (fingers crossed) more inventory will come on the market and I will be able to find more deals.
I want to buy $2 million worth of rentals
I am repeating this goal again too! Rental properties that make money have been in short supply in my market. There have been a few properties that came up for sale that were close to good enough deals for me and other investors jumped on them. I am thinking I may have to try a different market soon but I am not giving up on Colorado yet. I did make a post about the most landlord-friendly states which could help others and myself make a decision if I decide to invest in other markets.
I want to refinance $2 million worth of debt
I am still looking to refinance some of my properties that have private money loans on them. Luckily my lenders are very flexible and are willing to keep taking the interest I am paying them. If interest rates come down a bunch that would be awesome but I am not sure how far down they will go. I would also love to find a DSCR lender that doesn’t have huge prepayment penalties!
Social media and blog goals
I have many goals for social media. I want to continue to grow my YouTube channel and I would love for it to take off and focus my time on it but my other social media channels like Facebook and TikTok drive people to my YouTube channel. I also have not been writing as much on Investfourmore.com because I have been focussing on social media and I think that is one reason I have not been as successful online as I had hoped. I want to write more on my blog and make sure I am taking advantage of the brand I have built over many years!
Here are some of the social media goals:
150k YouTube Subscribers
400k Facebook followers
100k Tiktok followers
Increase traffic on Investfourmore to 50k users a month
I still want to hit that $50k a month revenue goal as well!
Conclusion
Setting goals is very important and something I do every year and keep track of all the time. To be honest, I could have kept better track of my goals in 2023. I had them written on a whiteboard and I looked at them but I did not set time away to plan as much as I should have. Another goal of mine is to focus more on my goals in 2024!
To learn more about goals and why I use them check this out.
Landlords across the country have been empowered to act as a kind of police force in the name of crime prevention for decades. How? Through local “nuisance property” laws and “crime-free housing” programs that require them to evict tenants for vaguely defined “criminal activities.”
As of Monday, California became the first state in the nation to ban so-called crime-free housing programs. More states should follow suit.
Such laws target low-income and minority renters for eviction and violate their civil rights. That’s bad enough. But they also fail to reduce crime.
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Cities across the country have been implementing these policies for about 30 years, building on the Anti-Drug Abuse Act of 1988, which stepped up evictions in federally subsidized housing. By 2019, about 2,000 American cities had a crime-free housing program, and 37 of the 40 largest U.S. cities had a nuisance property ordinance.
Even as these policies spread, their efficacy was in doubt. I led a recent analysis of California’s crime-free housing policies that found they had no effect on crime. Other researchers have found that by driving people into desperation and homelessness, nuisance property ordinances may actually increase property crime.
Crime-free housing policies backfire partly because they treat 911 calls as an indicator of criminal activity. This creates a perverse incentive: For fear of being evicted, tenants don’t call authorities when they need them.
This particularly harms victims of domestic violence, who may hesitate to seek help from police lest they lose their housing. These policies can also dissuade tenants from seeking medical aid during drug overdoses or mental health crises. Evictions also hamper crime prevention by disrupting community social networks, making it harder for residents to monitor what’s going on in their neighborhoods — a critical element of crime prevention.
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My study of California found that city blocks with apartments certified as crime-free saw 21% more evictions than blocks without such housing. Other researchers have found that nuisance property ordinances increase eviction filing rates by 16%. In the six months after the U.S. Department of Housing and Urban Development instituted a “One Strike and You’re Out” policy on criminal activity in 1996, reported evictions from public housing surged 40%.
Evictions are deeply harmful in many ways. People who are evicted struggle to find housing again, and tenants removed from public housing are prohibited from receiving housing assistance. That can lead to more homelessness and desperation. Evictions also cause disproportionate housing insecurity for children, more unemployment, additional use of emergency room resources, and accidental drug and alcohol deaths.
Legal experts have argued persuasively that punishing people with eviction instead of through criminal justice procedures also denies them due process. These policies don’t require an arrest or conviction or even an indication of crime anywhere near the property. They don’t even require a crime.
People have been evicted under crime-free housing policies over kids playing basketball or jumping on a trampoline and because of complaints about barbecues. Tenants can even face severe consequences for the behavior of their guests. One federal court case concerns an Illinois city trying to evict a family because of a burglary committed by a friend of their teenage son who had slept on their couch.
The policies tend to be selectively enforced, with low-income, multifamily properties bearing the brunt. This has led the Department of Justice to take action against cities for violations of the Fair Housing Act and other federal laws. In 2022, the San Bernardino County city of Hesperia signed a consent decree with the federal government related to selective application of its crime-free housing program. Lawsuits have been filed on similar grounds against cities in Washington, Illinois, Pennsylvania and Minnesota.
What is the point of these harmful policies if they aren’t reducing crime? Public officials have suggested their real goal is segregation.
A Hesperia official acknowledged that the purpose of the city’s crime-free housing program was to remove what he described as “those kind of people” and “improve our demographic.” The mayor of Bedford, Ohio, said the city’s nuisance property ordinance was about taking “pride in middle-class values” and curtailing “urban immigration.” The analysis I led found that cities with crime-free housing programs had larger Black populations and that the affected apartments were on lower-income blocks with larger Black and Latino populations.
HUD has issued guidance to cities on how these policies may violate the Fair Housing Act by disproportionately evicting women, victims of crime and people with disabilities. But more needs to be done.
Following California’s lead, other states should limit evictions under these policies without an arrest or conviction or based on the behavior of nonresidents. Cities should also be required to report the number of evictions resulting from crime-free housing policies and nuisance ordinances. Similar federal policies also need reconsideration, including the one-strike policy for public housing and the rules that prevent evicted tenants from obtaining future housing assistance.
These policies and the evictions they cause are at best an ineffective means of preventing crime. At worst, they’re a harmful form of discrimination that leads to more crime and homelessness. Ending them could make all our communities safer.
Max Griswold is a policy researcher at the Rand Corp.
I bought my first rental property in 2010 and I admit it was much easier to buy rentals that cash flowed back. At least it was easier in my area in Northern Colorado. A lot of people wish they could go back in time to buy investment properties (me included) but no one has invented a time machine yet. Wishing for the impossible will do you no good. Since we have to live in reality can you still make money in today’s market with rental properties?
Why is it harder to buy rental properties in 2024?
It is harder to invest in real estate in 2024 due to multiple factors.
Interest rates are much higher than they have been for decades. High-interest rates are making it tougher on everyone in real estate. The high rates make it harder to cash flow no matter what prices are. They also make it harder to refinance properties which can be a big part of investing in rentals.
Housing prices are higher than they have ever been. Now, in most markets housing prices will always be higher than they ever have been, that is how the economy and inflation works. However, prices are still high and that makes it tough to buy rentals that make money.
There is record low inventory in most areas of the country. When there are fewer homes for sale it makes it harder to find deals which is what most real estate investors are looking for.
Many areas of the country are enacting tenant-friendly laws that make it harder on landlords. Rent control, free attorneys for tenants, no-cause evictions are all making it harder on landlords.
There is a growing ideology claiming landlords are evil and hurting society because they raise prices and take housing away from owner-occupants.
It is important to know that even though these things make it harder for real estate investors trying to buy now, rising prices have made many existing real estate investors very rich. Landlords also help the housing market, they do not hurt it.
How do you make money with rentals in today’s market?
I hope I did not scare everyone off with the doom and gloom of the last section of this article. However, there are still ways to make money with real estate in today’s market. How do you make money with rentals?
High interst rates make it tougher to make money but they are coming down and they should continue to decrease over the next couple of years. Real estate investors have made money with higher rates for decades even if it is harder to do so.
Housing prices are higher but there are still good deals out there. There will always be good deals no matter how high prices are. The key to investing in real estate is getting a good deal whether you or flipping or buying rentals. Good deals can make up for all of the other issues.
While there are few houses for sale right now there are still houses and multifamilyl and commercial real estate for sale. Real estate investors also do not need to buy only properties that are for sale. There are also off-market deals that can be just as good or better than on-market deals.
There are a lot of areas that are enacting more laws against landlords. However, there are still many areas that are landlord-friendly and I made list of the best states for landlords here.
It may be tougher to invest in real estate now than ten years ago but it is still definitely possible to make money with rental properties.
What strategies can you use today to make money in real estate?
It might not work to buy a single-family house in Denver or Seattle or Miami as a rental anymore if you want it to cash flow. While it might not work in every city there are still many areas where you can make money with single-family homes. There are also different strategies you can use to make money with real estate.
Invest in different markets. Not every market will work for every real estate strategy. It is really hard to start out as an investor in an expensive market. There are many markets with affordable real estate and while it is not easy investing in a different market could be the route to take.
Being a landlord may not be the right move for you right now. It is possible to flip houses and make money in some markets when you can’t make money with rentals in those markets.
Switching to a different type of rental may help as well. I switched from single-family rentals to commerical real estate in 2016. I also added in some multifamily properties as well. They often cash flow better than single-family rentals in expensive markets.
If you cannot afford to invest in your market, finding a partner may be another way to make real estate work in your area. Many people love to have their money in real estate but do not have the time to find the right investments.
While it is not easy to invest in real estate right now, it is rarely easy. Even when I bought my first rental properties many people (including those in the industry and in my family) told me I was an idiot. They told me the market would keep crashing and real estate would never come back. It was also tougher to get loans back then and there were not nearly as many educational sources about real estate either. I learned most of my strategies from reading books, some that were decades old that I hoped would still hold true when I was investing.
Conclusion
There is no perfect time to invest. The only way to know when the timing is perfect is years or decades after that time occurred. Waiting rarely works out but luckily there are many ways to invest in real estate even if rentals won’t work for you in your market right now. If you want to learn more about investing in other markets I put together a very detailed webinar on the subject you can watch below.
An eviction notice is a formal letter written by a landlord or property manager to the tenant asking them to comply with the terms of the lease or vacate the apartment they are renting. You’ll get an eviction notice if you fail to meet the terms of your rental agreement.
It may sound like a scary term, so we are going to break it down for you in detail.
Common reasons for an eviction
Renters have rights. Landlords cannot lock you out of your apartment or evict you without proper notice first. Legally, landlords must give you a standardized, written eviction notice first and follow state laws and procedures. Basically, you’ll get a formal letter that lists the reasons why you’re being evicted.
These are the most common reasons for eviction:
Failure to pay rent
Repeated late rent payments
Repeated bounced checks for rent payments
Damaged property
Violation of the lease
Unauthorized pets or additional occupants
Illegal activity
Disrupting other tenants or several complaints from other tenants
Holdover or lease expires and the tenant refuses to move out
What does an eviction notice look like?
You’ll probably have some questions if you receive an eviction letter. This is what the notice should include:
Your name and address
The landlord’s name and address
Your contact information
The lease information
Reasons for eviction
Resolutions to the problem, if applicable
When, if applicable, the problem needs resolving by
Date tenant must leave the property
Proof that the landlord served the eviction notice to the tenant
Here is a sample eviction notice that will give you a good idea of what one looks like if it ever shows up on your door.
Sample eviction notice
The layout and details may vary, but in general, eviction notices include the same information. Below is a sample eviction notice for reference:
Apartment Community ABC
John Doe
Apartment Community ABC Apartment #1
Dear John Doe,
On DATE, you received a formal written warning regarding your failure to pay rent.
Your lease, signed on DATE, clearly states that your “failure to pay rent on the 1st of the month” violates the lease.
Because of your failure to uphold the rental agreement and resolve the issue, Apartment Community ABC is now submitting this eviction notice on DATE.
You have seven days to vacate the premises. You can find state requirements about eviction below.
If you have questions regarding this eviction notice, please contact the rental office and ask to speak to me directly,
Sincerely,
Property Manager Name
What happens after an eviction notice is served?
Once an eviction notice makes its way to a tenant, there are a few things that can happen during the eviction process.
Once the eviction notice is with the tenant, the tenant has a specific amount of time (outlined in the eviction notice) to resolve the problem.
Next, the complaint is filed in court and the landlord and tenant will appear in court. The judge will come to a verdict ruling whether the tenant stays or goes.
Keep in mind that the format of eviction notices may vary state-to-state based on legal requirements.
Can I rent an apartment after being evicted?
You may worry about the odds of being able to rent again if you’ve received an eviction notice. Evictions indicate that you failed to comply with your lease — many landlords will see this as a red flag.
It is still possible to rent an apartment after an eviction. However, landlords will see the eviction on your record when they run a background check so it might be more difficult in some cases.
Finding apartments that accept evictions
If you’re looking for an apartment and you have an eviction notice on your record, here are a few tips that may help you find apartments that accept evictions.
Check whether or not the apartment complex requires a background check
Find a private owner who rents properties
Work with an apartment locator or rental realtor who can help navigate the situation
Have a co-signer or guarantor on your new lease
Work to build up your credit score
Provide several references
Tell the truth about what happened with the eviction
Pay rent upfront, if possible
Renting after an eviction
An eviction notice is a blip on your rental history, but it doesn’t mean you’ll never rent again. Understanding what is an eviction notice, how to deal with it and what to do after an eviction can help you navigate your next apartment rental.
The information contained in this article is for educational purposes only and does not, and is not intended to, constitute legal or financial advice. Readers are encouraged to seek professional legal or financial advice as they may deem it necessary.
Sage Singleton is a freelance writer with a passion for literature and words. She enjoys writing articles that will inspire, educate and influence readers. She loves that words have the power to create change and make a positive impact in the world. Some of her work has been featured on LendingTree, Venture Beat, Architectural Digest, Porch.com and Homes.com. In her free time, she loves traveling, reading and learning French.
You’ve likely heard the terms rent control, rent-controlled apartment or even rent-stabilized apartment on television, in books or at the movies. But, what do these terms mean?
Does rent stay the same every year? Do rent stabilization, rent regulation and rent control mean the same thing? How does a renter find a rent-stabilized unit?
We’ll answer common questions about rent-controlled apartments and share how rent-stabilized units influence renters and property owners, family members and even the neighborhood around rent-regulated apartments. And, we’ll show you how to find one of your own.
What is rent control?
Rent control is a legal term for when a government agency (like a city or state) imposes restrictions on how much landlords can increase rent. Regulations vary by city and state. But, they generally limit the maximum amount a landlord can charge each month and restrict the annual rent increase.
What’s the purpose of rent control?
Rent stabilization and rent control aim to maintain affordable housing options for low and moderate-income tenants. These measures prevent sharp increases in rent, prevent some evictions and help keep people in their homes.
It’s useful when the supply of affordable apartments, condos and rental homes is low. It’s common in urban areas where the occupancy rate is high and the demand for housing sends prices soaring.
States and cities often enact price controls after a war or economic downturn. New York City was one of the first communities to impose rent regulations during World War II. The state of New York took over from the federal government in 1950. New York City now has over a million rent-stabilized apartments overseen by the NYC Rent Guidelines Board.
How does rent control work?
There are two types of rent control. Vacancy control protects current and future tenants. The city or state determines where to cap rent increases. The terms apply to future leases.
Vacancy decontrol means rents stay stable while the current tenant is in the apartment. Once that lease is up, the property owner can increase the rent. In some places, it can’t go higher than a particular dollar amount. In others, landlords can increase rents to whatever the market can bear.
Apartments tend to stay regulated. They may become deregulated if an owner claims it as a primary residence or if a tenant’s income exceeds a particular limit for two consecutive years.
What’s the difference between rent control and rent stabilization?
Rent control and rent stabilization are different. They’re both versions of rent regulation, a term that refers to limits on monthly and yearly rent increases.
Rent control is strict. It usually limits rents to a specific dollar amount. It includes older leases from when rent freezes were more common.
Rent stabilization limits price increases to a particular percentage. It’s much more common. For example, only a small percentage of New York City’s one million rent-stabilized apartments are under a true rent control agreement. The majority of these affordable homes are rent stabilized.
How can I find rent-stabilized apartments?
It depends on where you live. And, it’s not easy.
That’s because only a few states allow rent stabilization. In fact, rent control is illegal in many places. Consult this rent control map from the National Multifamily Housing Council (NMFC) to see what your state offers.
Protections vary within a state’s borders. In California and Oregon, rent stabilization laws apply to the entire state. In other places, rent stabilization measures are only available in particular cities.
Cities that allow rent control and rent stabilization often register rent-stabilized apartments with the city’s housing division. A renter in New York can consult a list maintained by the New York Division of Housing and Urban Renewal. Similar organizations (often called a rent board or rent guidelines board) may list available properties and provide valuable guidance. City offices and the city council may also offer apartment rental resources.
Can you inherit a rent-controlled apartment?
Even if your city or state offers rent regulations, actually finding a rent-regulated unit is a challenge. Rent-stabilized tenants are very aware of what a great deal they’re getting, so they move less often. Stumbling upon a stabilized apartment is rare. Renters in some very competitive cities have been known to read the obituaries to try to score a rent-stabilized apartment before it goes on the market.
But, even then, there’s no guarantee that the landlord will list the apartment. In New York City, a new tenant can inherit an apartment in a rent-controlled building if they occupy it for two consecutive years. So, if a long-term resident has planned ahead and invited a family member to move in with them for at least two years (and if the building is older than 1947 and the family lived in it since at least 1971), the general public will probably never see that apartment listing.
What kind of buildings contain a rent-stabilized or rent-controlled unit?
A rent-stabilized apartment is often found in an older building. Price controls typically apply to a building that contains six or more units. Language stating it’s a continuously occupied primary residence is common.
For example, in New York City, most true rent control tenants reside in buildings built before Feb. 1, 1947. Renters must have lived in their apartment since July 1, 1971, to qualify.
Focus your search on older buildings and buildings that contain rent-stabilized units. Eliminate an apartment building if it doesn’t have at least a half dozen units inside. Cross-reference these buildings with available units to increase your chances of a match.
How can you secure a lease for a rent-stabilized apartment?
If you’re lucky enough to find a rent-stabilized unit, act quickly. Competition is fierce.
Schedule a tour immediately. Document your rent history, bring the paperwork the landlord requires for the application and prepare for a background check. You may need to accept certain expenses without negotiation (like a pet fee or parking fee) in exchange for saving more money on rent every month.
If the apartment, the building and the neighborhood are a fit, sign the lease right away. Make sure any roommate or family member on the lease is available to sign it, too.
If you’re one of the fortunate ones who inherit a rent-controlled lease (after living there for two years, of course), protect it. Promptly pay rent (and every fee) and renew your lease.
Then, plan for the future. Your descendants will have to live there for two years if you want to pass it on.
How do rent-controlled apartments affect renters?
Your monthly rent payment is a major expense. Finding a rent-stabilized apartment is an effective way to keep housing costs down.
Rent-controlled apartments help keep low and moderate-income residents in their homes. This is especially important for people on fixed incomes, like the elderly and the disabled. Rent control can prevent some evictions and increase housing stability.
If residents can afford their rent, it’s easier to build their credit and rent history. Saving money on rent means people can pay down debt, increase their savings and provide a more financially secure life for themselves and their family members.
How do rent-stabilized apartment buildings help communities?
People who can easily afford their current apartment renew their leases more and move less often. They deepen their ties to their neighbors and patronize local businesses. Rent stabilization can lead to community renewal and stability.
How does a rent-controlled apartment affect a landlord?
The ability to renew a lease for less than the market rate is a great deal for a tenant. It’s not such a great deal for a landlord.
If a landlord can’t count on rent increases to keep up with inflation or taxes, they have to find new ways to pay their bills. They might charge a parking fee or increase the pet fee and deposit. Your landlord may delay maintenance or repairs or invest less money in their building.
They might raise the rents on other apartments to make up for the cost of maintaining rent-controlled homes. A landlord may also convert rent-stabilized apartments into condos to earn more revenue and protect their investment. This reduces rental inventory.
Apartment owners may build condos or vacation homes instead of apartments if local laws prioritize rent-controlled apartments. That makes it harder to find an affordable primary residence.
Rent control is a great way to go
Rent control and rent stabilization affect landlords, tenants and entire cities. It’s a challenge to obtain a rent-controlled apartment, so if you find one, hold onto it.
The information in this article is for educational purposes only and does not, and is not intended to, constitute legal or financial advice. Readers are encouraged to seek professional legal or financial advice as they may deem it necessary.
Alicia Underlee Nelson is a freelance writer and photographer. Her work has appeared in Thomson Reuters, Food Network, USA Today, Delta Sky Magazine, AAA Living, Midwest Living, Beer Advocate, trivago Magazine, Matador Network, craftbeer.com and numerous other publications. She’s the author of North Dakota Beer: A Heady History, co-host of the Travel Tomorrow podcast and leads travel and creativity workshops across the Midwest.