Quick Money or Steady Money?

Before the first dollar changes hands, an investor and/or potential landlord should ask themselves "Do I want steady money or do I just want quick money"?

I can only speak for myself, but if I was asked, my answer would be steady money.  I think this is the one area that will  (and does) quickly break a lot of investors and/or landlords.

You can double the market rate on a house and eventually you will rent it to someone.  True. How many months will that house sit vacant before that happens and how long will the tenant stay there once you get it rented and what kind of condition will they leave it in once they move (or get evicted)?

Personally, I would prefer to have a tenant in place for 2 years paying $800 a month ($19,200) than a tenant in place for 6 months paying $1,200 ($7,200).

If you're willing to take someone with less than stellar credit, you will be able to get a higher than market value on that property....for a month or two anyway.  People with bad credit expect to have to pay more for everything than those with good credit.  Sadly it's a fact of life these days that those who don't have the means to pay high prices are forced to do so because of their credit histories.

Let's say you find what you believe is a perfectly lovely person to rent your house at the inflated price.  One of three things is going to happen.  

(1)  Renters are just as price savvy as buyers.  Good renters know about what to expect to pay for rent in any given neighborhood.  A good renter will know right off the bat if the property in question is overpriced and will move on down the road.  

If they don't - you may have just rented your property to a meth cooker or some other sort of criminal who has nefarious plans for the use of your property.  Plans that down the road could land you in some very hot legal water and might even end up costing you your property.  Believe me, renters who set up meth labs or grow houses are more common than you would like to think.

(2) If someone pays a higher rent on your property than they could go down the street and get, there's the chance that you've just rented your property to someone who is on the verge of getting evicted from their current property and they just need somewhere to put their stuff for a month or two while they look for a more affordable property to get into.  I know, sounds ridiculous doesn't it that a person would pay the deposit and first month's rent just for a temporary solution.  Trust me when I tell you that this too is a much more common occurrence that you might think.  I have witnessed it on more than one occasion.

But how can they do this if they are about to be evicted?  Won't that show up on their background check or when references are called?

If the eviction hasn't been filed yet, nothing will show up on a Court search or on their credit history.  As for the reference checks, when you call the landlords number shown on the application how do you really truly know you are talking to a landlord and not the applicant's sister, brother or best friend?  You don't.

People like this know how to work the system and they associate with others who know as much about the topic as they do.  I can pretend to be anyone's landlord.  All I have to do is tell the caller that I own the home privately and the tenant has been a wonderful tenant that I hate to lose but I've decided to let my son move into the house so the tenant needs to find alternate housing.  See how believable that sounds?

or,

(3) You have just been suckered by a career non-rent payer who is going to give you the deposit and first month's rent, move in and never pay another penny.  They are going to string you along with all manner of sob stories and bad luck and get you to wait until the 15th, then the 1st, then next week.....but next week never comes and one day you awake to discover that you've allowed them to live in your house for months.....for free. 

These folks are cagey.  They will throw you a bone from time to time.  $100 here, maybe $200 there but never anywhere near the whole rent.  Just enough to make you think that they are at least making an effort.  But the thing is, those bones are very few and very far in between.

But never fear.  They will move.  After you've spent time and money paying someone to evict them and after you have waited the required period of time before you are allowed to go into your property to put their things on the curb.

Putting their things on the curb....now we're getting into the part that lets you know where all that "extra" money you got for the deposit and first month's rent is going to go towards.  You thought it was going to go towards your retirement or your child's college education or maybe paying off your own personal debt didn't you?  Sadly, it won't.  It will all be spent (and then some) on paying to get the tenant evicted, loss income while the tenant is living in the property for free and getting the rental ready for the next tenant - which could take a couple of months realistically.

Why a couple of months?  Because when you run across this type of tenant, you might as well cash out your 401K because by the time you clean up the yard, the house, repair the damage they caused and get it ready to rent again....you're looking at some serious time and money.

I managed a house a few years back.  The landlord accepted a tenant against my recommendation.  "She's awesome" I was told.  She had marginal credit but a steady job and loved the house!  Within a month after moving in the house, this "awesome" tenant had been fired from her job (for stealing), her car had been repoed (goodbye marginal credit and hello bad credit) and then came the sob stories and bad luck songs.

The landlord kept thinking it would be cheaper in the long run to take the $100 here and there that this tenant dished out sporadically than to go through the eviction proceedings and miss a month or two on rent altogether.  After all "she was trying".  It turned out to be more like 6 months.

By the time I finally talked the landlord into allowing me to evict the tenant, the damage had been done.  The tenant fought the eviction pushing the process from 1 month to 3 months. When I was finally able to go inside the house, I almost fainted. 

Fleas EVERYWHERE.  Feces in every room.  Newly refinished hardwoods destroyed. Doors clawed and chewed by the 4 large dogs that she kept in the house (which were not included in the lease).  4 broken windows. 2 busted doors. Massive holes in the walls and even in some of the ceilings. Roaches everywhere.  Grass was literally as tall as the house. Weeds had choked the life out of the numerous flowers in the flower beds.  Concrete retaining wall looked like someone had repeatedly run a truck into it.  Mountains of garbage in every room and all over the back patio. As if all of that wasn't bad enough, they had their water cut off for nonpayment several weeks before and had decided to go ahead and use the toilets anyway and once the toilet was full - they used the bathtub.  Now add to all of this the fact that needing money to move, she and her boyfriend (who wasn't on the lease) stole the central heating and air unit and sold it.  Only they didn't disconnect the unit.  They ripped it out.  Electrician bill to go along with the cost of replacing the units.

I tell the specifics of this story to illustrate my point that while the landlord did initially make about $600 more on this property than it was worth on the market, the cost of evicting this tenant and getting the house ready for the next tenant was a grand total of $13,000 (and change) and that total doesn't account for the lost rent.  On top of that, she only received the deposit and a grand total of 2 months rent from this tenant.

You may be thinking, "I'll sue them for the damages and also have them arrested!".  Good luck with that.  Many states don't allow landlords to actually have a tenant arrested for damage to their property.  They consider it to be a civil matter rather than a criminal matter.  As for suing the tenant for money damages, you can do that in all states.  But what are you going to get in return?  Nothing.  For one thing, in order for this to really impact the tenant's ability to rent (especially from a private landlord) you will need the judgement to show up on their credit report.  Unless you are willing to pay for a membership to all 3 of the reporting agencies (which is not cheap), then it isn't going to show up on any credit report.  Secondly, you may indeed have a judgment against the tenant.  How are you going to collect that money?  These people are what lawyers call "judgment proof".  Meaning they don't have anything for you to take - or at least nothing in their name.  They typically either don't work at all or only work for a short time and only sporadically at that.  Remember the old saying "you can't get blood out of a turnip"??

Everyone deserves a place to live.  Rich, poor, good credit or bad credit.  Everyone should be able to have a roof over their heads.  However, do you really want to trust your property to someone who is going to do this to you?  

My rule of thumb is to set the rent at a reasonable price and rent it to someone who checks out. Maybe they have bad credit but their rental history is stellar.  At the end of the day if a person pays their rent on time who really cares if they don't pay their VISA card on time?

The key phrase in the above paragraph is "checks out".  Pictured ID so you know if the person applying is using their info and not their infant child's info.  Get the last 6 paycheck stubs from them and don't accept copies or printed versions.  Those are far too easy to forge.  If necessary, get the employer's address and mail the verification form to them.  If the applicant gives you their landlords info and it appears to be a private individual - go to the tax collector's website.  There you will be able to search by address and that site will tell you exactly who owns that property.  If the name or contact info doesn't match - chances are you've been given bogus information.  

At the end of the day, you won't get rich quick by accepting reasonable rent.  But chances are, you won't wind up in bankruptcy court either.

10 "Haunted" places in Alabama

It's October again!  Time for my list of places in Alabama that are rumored to be haunted.  Let's get started!

Haunted Highway 5 near Lynn, Alabama

Highway 5 Ghost – Lynn, Alabama…Supposedly, years ago between Natural Bridge and Jasper, Alabama on Highway 5, a teenage girl had been to prom with her boyfriend. It was a rainy night. On the way home from prom, they got into a fight and she told him to let her out because she could walk. While she was walking along the side of the highway, she was struck by an 18-wheeler. The driver drove off, and the next morning she was found dead in a ditch. They say if you drive an 18-wheeler down Highway 5 on a rainy night, she’ll climb onto the side of it and peek inside to see if you’re the driver who killed her.  Not wanting to experience the sight of this angry apparition, many truckers bypass this stretch of road, choosing instead to take Highway 13. Truckers admit that driving down Highway 5 in a truck is still undeniably eerie.

Tutwiler Hotel, Birmingham, AL

The Tutwiler Hotel is said to be haunted by a mischievous spirit who likes to turn on lights and appliances inside the building. Some have suggested that the ghost belongs to Colonel Tutwiler himself, however, the current hotel is not actually the original building that once bore his name, and is in fact located in a different location which had previously been an apartment complex. It is possible that the ghost belongs to a former resident of the old Ridgeley apartments who lived there before they were renovated to become the new Tutwiler in the mid-1980s.

Guests, as well as staff in the hotel, have many ghost stories to tell. A bartender who once worked at the hotel had several ghostly experiences in 1995. The lights in the bar were left on for a week and the boss got quite angry with him. After all, it was his first job to turn off the lights in the bar and the kitchen during closing time. He started turning the lights off but they would turn on by themselves. After turning the lights off four times, he left for the evening.

The next day the manager asked why the lights were on. The bartender tried to explain but the manager would not believe him. This happened for five nights in a row and on the sixth night, the manager called the bartender and told him to come to work immediately. When he got there, there was a complete multi-course meal with candles and a bottle of wine. Many people believed that it was the ghost of Colonel Tutwiler, for which the hotel was named after. In order to stop the Colonel from making a mess again, he would call out to the Colonel each night to tell him a good evening and not to make a mess, and they haven’t had that experience since. A very respectful ghost indeed!

Other reports are of knocking on doors in the middle of the night. Several guests have reported loud rapid knocks on their room door, only for them to quickly jump and open it to see nobody standing there. This ghost is known as the knocker, it is believed to be a male spirit because he wakes women up with his knocking during the night.

The Drish House in Tuscaloosa, Alabama

According to The Lineup, Tuscaloosa’s Drish House has officially been named the most haunted place in Alabama. It was built in 1937 by Dr. John R. Drish over a 450-acre plantation. Apparently, Dr. Drish, who loved gambling and drinking, died in 1867 from falling down a stairway while drunk. His wife, Sarah, became obsessed with planning her husband’s funeral, so much so that it became an overly elaborate event. She even kept the candles from his funeral with the intense hope that they be used at her own funeral. When she passed in 1884, her family searched the house endlessly to find the candles but could not. This is said to have angered Sarah so much that she has come back to haunt the house, even allegedly causing a fire in the third-story tower by lighting the candles. The Drish House has been featured in the short story “Death Lights in the Tower” in Kathryn Tucker Windham’s popular book of ghost stories, Thirteen Alabama Ghosts and Jeffrey. 

As you can see from the pictures above, over the years, this once magnificent mansion was used as a business and was deserted for a long period of time.  Thankfully, it has been completely restored and is now a venue for receptions and events.

Jemison Center or Old Bryce Hospital in Northport, AL

A former insane asylum, Old Bryce Hospital had a reputation for treating its patients horribly, even verging on torture.  Built in 1861, and considered a progressive facility for treating mental health, the institution’s reputation deteriorated significantly by the early 1900’s. The building is a designated historic site, but was in use until 2009.  For nearly 150 years, visitors to this site claim to feel hot and cold spots, see items moving of their own accord and hear ghostly sounds and footsteps. Some have even seen the tail of a doctor’s coat travel through the halls. Screams, scuffling of feet and unexplained creaking of doors have been reported.  It is slowly being demolished and is often patrolled by the police, so if you are thinking of doing any ghost hunting in this location, you might want to be extremely careful.

Redmont Hotel, Birmingham, AL

When the Redmont Hotel in Birmingham, Alabama opened in 1925, no one knew it was to become a haven for assorted ghosts and ghost hunters alike. Ghost stories are part and parcel of many old hotels, the Redmont included.

Opulent ballrooms and meeting places reflected the much sought after New Orleans style of over the top extravagance. Huge chandeliers and heavy silk curtains drape the public rooms. Elaborate musical performances went on as the couples swirled around the dance floor. It was a hot spot of the Roaring Twenties elite; the place to see and to be seen.

The Redmont drew the famous and the notorious, lured by the hotel’s sometimes scandalous reputation.

But the most legendary guest – and soon to be ghost- was country singer Hank Williams, well-known for the hit song, “Your Cheatin Heart.”  He spent his last night on earth in Suite 301; although present-day desk clerks and bellhops decline to confirm this unless you specifically request that room.

The story of Hank Williams final journey through Birmingham is told in the 2011 movie “The Last Ride.” It tells how Hank hired a young man, Charles Carr, to drive him in his 1952 blue Cadillac (Now called the Death Car) from Tennessee to Ohio through a snowstorm for a New Year’s Day performances in Charleston, South Carolina. He appears to have died in the back seat in Oak Hill, West Virginia, as Charles discovered when he pulled into a gas station. The Cadillac can be seen today in a Hank Williams Museum in his hometown of Montgomery, Alabama.

Hank was only 29, dying of heart failure due to a mix of alcohol and drugs, and a lifetime of abuse. His last night at the Redmont appears to have been a fun one. Three women joined Hank for a while when he said: “You are from heaven, but you are going to send me to hell.” 

Hotel guests soon after his death reported seeing figures, hearing disembodied footsteps and strange sounds.

Hank Williams is not the only ghost you will encounter at the Redmont. Visitors claim to feel and see the eerie presence of long deceased Clifford Styles, who purchased the hotel in 1946 and died in 1975. Doors have opened and closed seemingly by themselves. Baggage and furniture appear to move without any earthly assistance.

Also, a woman who was killed in the hotel stalks the halls in an appropriately misty white dress at night, specifically on the ninth floor. There is a small ghostly dog who roams around the hotel. Some say the dog is searching for his murdered mistress.

The hotel was very modern for its time in the 1920s. Each room had its own private bathroom, ceiling fans, and chilled water, very much the hippest place in town.

Alabama politicians have used the hotel as campaign headquarters including Governors Jim Folsom and George Wallace in the 1950s and 60s. Sports celebrities were also interested in the Redmont. A group of NBA stars, including Kareem Abdul Jabaar, purchased the hotel in 1983. Plans for a major 2006 renovation were scrapped after the global economic downturn.

Author Alan Brown chronicles the hotel’s history in his book, “Haunted Birmingham.” The Redmont is also a focus of the “Birmingham Ghost Walk” and “Birmingham Trolley Tour.” 

Jack Cole Road, Hayden, Alabama

Rural Hayden is home to the most cursed stretch of road in Alabama. Since the 1890s, residents of densely-forested, unpaved Jack Cole Road have reported strange sightings of mysterious animal-like creatures. Since 1890, 68 deaths have been reported on Jack Cole Road, 60 of which were due to an outbreak of Cholera in 1900. The other eight were caused by stranger events, including murder. People claim to see things like lights in the woods, to hear loud sounds, to glance ghostly figures walking along the road and, strangest of all, to see a deformed Bigfoot-like animal that looks to be half-wolf and half-man.  In the 1940s, the mummified remains of an old woman were discovered at a home hidden deep in the woods along the road. Adding to the macabre history, there have been numerous disappearances, murders and unexplained deaths in residences along this remote street. Homeowners tell stories of eerie lights in the woods, and a constant sense of something disturbing. The cursed nature of Jack Cole Road is hard to ignore, even today.

Gaine's Ridge Dinner Club, Camden, Alabama

The Gaines Ridge Dinner Club has been named the “Most Haunted Restaurant in Alabama.” The popular restaurant is located in an 1820s Antebellum home and is well known for its family of ghosts. Several guests have reported hearing screams, the aroma of pipe smoke when no one is smoking, a floating woman in the windows, the cries of a baby and apparitions in mirrors of a tall, bearded man in black. The owner reports her experiences with the ghosts as “ghost truths” rather than ghost stories, because she has absolute conviction that they happened to her. She says she heard the mysterious screams of a co-worker who denied calling out to her even though they both heard the yelling. 

St. James Hotel, Selma, Alabama

Located just an hour away from the Gaines Ridge Dinner Club and built in 1837, the St. James Hotel is one of the oldest operational facilities in Alabama. During the Civil War, soldiers used the hotel as a place to discuss battle strategies, and when the Battle of Selma took place, the entire town of Selma pretty much burned to the ground, but the St. James Hotel remained standing. After the Civil War ended, a man named Benjamin Sterling Tower became the new owner and allowed a group of outlaws, led by the famous gang leader, robber and murderer Jesse James, to stay at the hotel one night. Several guests have reported seeing the spirits of Jesse James and his girlfriend, Lucinda, as well as a man fully dressed in clothing from the 1800s in rooms 214, 314 and 315. Lucinda, a lover of the scent of lavender, allegedly leaves the lovely scent in her path, alerting guests to her presence. James’ black dog also haunts the halls of the hotel, as evidenced by guests accounts of incessant barking with no dog in sight. You can book a room at the St. James Hotel today, and if you’re brave enough, request room 214, 314 or 315.

Fort Morgan, Gulf Shores, Alabama

The Fort Morgan area has become a vacation spot for beach-goers hoping to relax and enjoy the sand and surf. Little do they know, Fort Morgan has a rich haunted history dating back to the Civil War. The fort took heavy fire throughout the bloody Battle of Mobile Bay. It is rumored that visitors can hear the cries and screams of men late into the night, and they have seen the ghost of a solitary woman searching for justice after being killed at the fort. If you visit Fort Morgan, look out for men in Confederate uniforms hidden in the shadows!

Ghost Bridge, Florence, Alabama

Last, but most definitely not least, is the haunting of Jackson Ford Bridge, properly nicknamed “Ghost Bridge.” This spot already appears terrifying and haunted simply by its dilapidated and decayed appearance. There are also several rumors from locals of a white mist that rises from the creek and lies atop the bridge as well as sightings of a strange orb of light, the apparent sound of footsteps and monster-like beings walking the bridge at night.  Sadly, the bridge has been demolished but I doubt removing the bridge will remove the spirits....right?