http://www.smartmoney.com/taxes/income/buying-a-condo-for-a-college-kid-is-a-tax-smart-move-23572/?zone=intromessage

In truth a Landlord may hold a Tenant financially responsible for re-marketing the property, leasing commissions, and lost rent. In reality, the Landlord would rather negotiate a flat fee settlement that is positive for both parties.

There are two typical settlements that we see that seem to leave both Landlord and Tenant walking away in a win-win situation.

The first settlement is when the Tenant pays a flat marketing fee (usually $200 -$300) and the Landlord begins to Market the property for rent. The Tenants assist with showings and when a suitable prospect is found, the property is leased. It is not a sublease, so the Tenants simply vacate the premises (following lease guidelines for moving-out) and their obligations are finished. The Tenant does a lot of the leg work with showings, etc…, but they are very much in control of how quickly the property rents.

The second settlement is where the Tenant moves out at the end of a calendar month. They agree to pay the next month’s rent, as well as leave the property in the condition outlined under the lease move-out terms. In addition to paying the rent, the Tenants also agree to forfeit their security deposit if the Landlord is unable to lease the property within 30 days. The benefit for the Tenant is that they are not responsible for showings, marketing or when or how much the Landlord is able to lease the property. The Tenants may lose their security deposit but they can forget about any future obligations with the property.

Of course, there are Tenants who try to “leave” their security deposit behind as they move out without notifying anyone. Often the properties are not left in good condition and the Tenant usually takes the attitude of “come try to find me and sue me.” But in reality, they will end up owing a lot more and if they ever have ever have a desire to lease a decent property, get a government job, by a car with a good interest rate, or buy their own home, they may regret that “middle of the night” move-out.  Landlords are usually able to add marketing fees, penalties, unsubstantiated move-out repairs and charges, and without having to wait much more than a month get a judgment rendered on the Tenant’s credit. Then they just sit back and wait, sometimes having to re-file the judgment once or twice every 3-5 years. 50% of those Tenants with Judgments end of paying the entire judgment off within 5 years…people grow up and find they can’t run from their record.

The answer is NO, and this has been backed up by the courts (at least in the counties where GWM manages property). The court’s logic is this: The Tenant is given the grace period of 3 days without penalty (and Landlords, don’t try to hold the Tenant to late fees if they pay within the first 3 days of the month – you will lose in court – gotta have a grace period), even though most leases say that “Rent is due on or before the 1^st of the Month.^.” The courts almost exclusively force Landlords to have this grace period because often times the 1^st of the month falls on a non business day (holiday or weekend). For this reason specifically, if the 1^st is on a Saturday or Sunday, Tenants are allowed to pay the following business day without penalty…and of course, the grace period allows this to happen without penalty.

Now for those Tenants trying to get one over on their Landlords, they will try this move: The 1^st of the month is on a Thursday, the grace period would extend to the weekend, and for good measure lets say Monday is a holiday (say Labor Day weekend)…the Tenant would literally pay on the  6^th of the month! This is obviously ridiculous and the courts agree…but why?

The Landlord Tenant-Laws recognize that rent should only be collected on a business day and not on a weekend or non holiday. The court will even allow this rent to be mailed in. But what the court won’t due is treat the grace period as if it were the same as the 1^st of the month (or the day the rent was due without penalty). The court does not give the “grace period” the same weight and therefore does not accept the argument that the rent should be without penalty if paid outside the 1^st of the month and listed grace period. As a side note, at a minimum the grace period should be through the 3^rd day of the month, although technically a Landlord can make the grace period as long as he or she wants.

In this rare of exception, common sense rules the day: Rent is due on the first, and because that day can happen to fall on a holiday or weekend, the Landlord gives the Tenant and extra few days to pay…how in the world does a person think that to take further advantage without penalty, I don’t know.

Lets start with some basic assumptions:

If you didn’t have pets or children or if you didn’t throw wild frat parties, we can assume that the home has a decent chance of normal usage.

If you didn’t hang an unordinary amount of pictures, punch holes in the walls, or smoke in the house, we can assume there are no major damages to the interior.

If the blinds still work and aren’t chewed up, the air filter was changed regularly and you were smart enough to take all your personal possessions (whether you wanted to or not) with you when you moved out means you are probably in good shape.

There are a few last items that you should do to protect yourself and make sure you get the most money refunded from your security deposit.

1. Have the home and the carpets professionally cleaned once all your personal possessions are out…show the Landlord and/or Management company the receipts (heck, make a copy for them).
2. Change out all burn out light bulbs.
3. Make sure smoke detectors have fresh batteries.
4. Change the air filters.
5. Remove all weeds from the yard.
6. Schedule the utilities to be shut off on the last day of the lease.

Look if you do these things, you control the price. If you leave this to the management company or landlord, don’t be surprised when the deductions are outrageous. Here are a few examples:

1. If you don’t have the home or carpet professionally cleaned, rather you just clean the home yourself, you can’t prove that you actually cleaned the home and you may not be abiding by the lease terms. Not to mention, you will be stuck with the price of a random overpriced contractor (this will be a recurring theme).
2. Contractors have to make a living, so even though you can change the air filters, batteries and light bulbs at your home for less than $25, the contractor has to go see the damage, then drive to home depot, front the money to purchase all the materials, and then take the time to actually make the repairs. What might normally be $25 can turn into $100 in the blink of an eye.
3. If you leave your satellite dish, there are broken screens or there are dead plants, chances are you are going to pay some ridiculous amount to get this fixed.
4. If you don’t turn in all the keys and remotes that are listed on your lease – there is probably a “rekey” fee in addition to the cost to make a copy or new key.

There are always going to be questions on what is “normal wear and tear” and this usually come into question with the condition of the walls and floors (or more appropriately paint and carpet) upon move-out.

Major stains are going to make it easy for a Landlord or Property Manager to charge the Tenant for replacement. The Landlord can charge the Tenant “per room” so if each room has a major stain, then be ready for a big bill.

Painting, specifically touch up patching and painting is the toughest to call. Usually Tenants make it easy on Landlord’s by trying to do the touch up on their own…and they fail miserably. If there only a few nail holes in a room, and the holes are small, there usually will not be any charge. Tons of nail holes will probably require a charge.

There are also rubs on walls or miscellaneous marks that are going to require the same attention. Look if there are one or two or its minor in a room, you shouldn’t have anything to worry about…if they are all over, well then get ready.

Lastly, remember that you should take a lot of pictures of the property on your way out. That being said, if you don’t do the same thing, and fill out your move-in walk thru or property condition statement in detail, then it won’t matter. Now remember, if you go overboard or write down things that are excessive in your Move-in Walk thru statement, be ready for you not to be taken seriously…by both Landlords and the Courts.

But the most common question our clients usually ask is “can we go after the Tenants for monetary damages, including lost rent?” The truth is you can definitely go after them…but do you really want to!

The time and energy it takes to file the judgment, track down the Tenant (and if in certain states like California, you have to find all of the Tenants), find where they work, file a writ against their place of employment to attempt to garnish wages, or turn it over to a collection agency and possibly get 30-40 cents on the dollar (if they can even collect) is often a lot more work and money than the judgment is worth.

Then there is the question of exactly how much can you get? Remember you are only going to be awarded damages to the property above normal wear and tear and you have to prove those damages. Also, you can only collect lost rent by month. For example if you have 6 months left on a lease when a Tenant is evicted, you are not entitled to all 6 months. You are only entitled to the vacant months until you re-rent the property.

Lastly, in the current rental market, many of the Tenants don’t have great credit to begin with, so threatening them with collections or judgments really has no impact. You may not be the first collection and if you have had to evict, you most likely will not be the last.

So what should you do?

1. Screen better: this doesn’t mean you become obsessed with credit score but rental history references and employment history will be key to decreasing the likelihood of eviction
2. If you do have to evict, don’t make it an emotional experience. Try to reach out to the Tenants and get them to leave before the eviction. This will save you money and potentially stop the Tenants from unnecessarily damaging the property (don’t bet on the property being cleaned, but its better when the home isn’t missing appliances and cabinets).
3. If you do evict and retain a judgment against a Tenant, pay the money to file the judgment where it will remain on record in the county where it is awarded for 3 to 5 years.  This is in expensive and is usually enough to get the judgment onto the Tenant’s credit report.
4. If you choose to go the collection route, you can file a motion for a debtors examination or attempt to garnish wages, garnish bank account or have a writ of execution completed against the personal property of the Tenant.

Understand that Number 4 can be extremely time consuming and may not bear fruit. As always, consult your local attorney for their expert opinion, but remember the key here is determining whether the “Juice is worth the squeeze.”

Even if you live close to the property you are going to rent out and this isn’t your first rodeo, the only time that it make sense is if you have the time, energy and have a list of trusted contractors on speed dial. When things are good, of course managing the property on your own is easy. Tenants who pay on time, rarely ask for things to be fixed (or if there is something needed, they fix it themselves) are great.

Unfortunately that is not always reality.  Statistics show that over 15% of Tenants are late paying rent each month and that over the course of a one year lease, Tenants are late at least twice 35% of the time. Throw in that evictions occur at least 10% of the time and you might want to get familiar with the inner workings of the local court system.

Repairs can be an even a bigger hassle. Do you have the Tenant who nit-picks everything expecting the house to be like a brand new car just rolled out of the assembly line? Are you ok with weekend and after-hours calls about everything from repairs, to “chit-chat” about all the things that are wrong with the home but the Tenant “is ok with for now.”

Landlord-Tenant law…do you know it? How often are you going to do inspections?

For 8-10% of the monthly rent, you don’t have to deal with all these potential headaches. For peace of mind why would you do it any other way? If you have just one major issue – is all your time lost worth it worth less than $100 per month?

For many this means trying to find out who their new roommates will be just as they are finally getting used to (or sick of) their current roommates. 10 years ago students wouldn’t start looking for a new home or apartment until after spring break. Today the same can be said, except those students are the same ones who call our office desperately trying to find something within biking distance and are constantly told “we don’t have anything else that close.”

This year GWM has put together a few simple rules to help you secure that great home close to campus without losing your mind.

1. Start Early – If you haven’t started looking at homes by the first of February, you are going to miss the best deals.
2. Determine what side of the campus you want to live (sam huges, between park and mountain, south of the stadium) and try to find out the ballpark price for homes or condos on that side of school.
3. Figure out if you want a house or an apartment…the best rule of thumb for this is if you will only live by yourself or with one other person, then look at apartments (or condos). If you need a yard, want a garage or want to be with a bunch of friends for the year, then start focusing on a house.
4. Don’t try to identify all your roommates right away. Instead If you can identify at least one and in the best case a third person, then you are in great shape. Landlords don’t need everyone, but they will want one or two Tenants plus Guarantors (yes, that means mom or dad most likely).
5. Get your Co-signer or Guarantor(s) ready! Every college student will need a guarantor because most of them don’t have credit history, a job (that pays enough to cover 2.5 times the rent) or references from previous rentals. This means that a parent or guardian will most likely have to fill out an application and submit it with your application in order to be approved for that house you like.
6. Remember – its first come first serve! So the longer you take to turn in applications or come up with the security deposit, the more likely another organized group of students will come in and rent that house from beneath your nose!