First rental tenant/neighbor parking issues - should I quit?

Question

Hello! This is probably going to be a bit long and I will try to keep my ranting to a minimum, but I want to make sure I include enough info/backstory to hopefully get some proper advice.

I have been interested in real estate investing for the last 6 years or so, and have been a lurker on the forums here for most of that time. My wife and I decided to hold off on getting started with rental properties until we were able to purchase our first house for ourselves since we live in an expensive market and had to save for a long time to even do that. (Montclair, NJ). We lived in our first house about 3 years, when my mother-in-law unexpectedly passed away, so we thought it would be best to buy a bigger house and move my father-in-law in with us to help care for him. Because we were splitting the cost of the new house, we had didn't need to sell our old house for the down payment and figured renting our old house was the easiest/smartest way to get our feet wet with rental property investing as it was sort of an inadvertent house-hack.

That's the backstory.

For the last month, since our tenants moved in, they and our old neighbor at that house have made my life so incredibly stressful - to the point where I am considering throwing in the towel and selling the house.

The house has a shared driveway with our neighbor, and the back of the driveway where the 1-car garages are for each house is very small and doesn't allow enough room for parking without blocking entry coming or going from the driveway. My tenants have 2 cars, a ford explorer and a suburban (just my luck, right? About the biggest car they could have). The tenants first complained because they were trying to use the 1 car garage as storage and park the Ford explorer in front of the garage. They got in arguments with the neighbors, who they were blocking in, when the neighbors told them they couldn't park there. After telling them they could not in fact park there and that's what the garage was for, they said that had they known they "had" to use the garage for car parking instead of storage, they wouldn't have signed the lease. So, because I didn't specify this in the lease they threatened to sue me unless I reduced the rent. We agreed to lower the rent $250 and moved on. They were fine with parking their other car on the street. Less than 2 days later I received a phone call saying that the police gave them a ticket for parking over night on the street (not allowed in our neighborhood between 3-6am without permission from the police department - which I had told them). The police apparently told them even if they called their car in every night it wouldn't fly long term. They started threatening again and said they needed to be allowed to park in the driveway, to which my neighbor again said absolutely not. After speaking with the lieutenant of the police department he gave me the option of letting them park in a lot down the street to which they refused because again, they felt they should have known that ahead of time. The other solution the lieutenant offered was giving me a temporary pass (about 3.5 weeks) to let them park on the street while I tried to find a contractor to put a double gate in the fence and a gravel parking spot in the backyard (which takes up half of the small backyard).

Realizing that this was going to be an issue whether it was with these tenants or with future tenants, and also that a lot of this WAS my inexperience (we only had one car and parked in the garage so it was NEVER an issue when we lived there) I decided to move forward with the parking spot, which cost me $2300. 2 Days before it was set to be installed, I got a VERY long email from the tenant expressing his frustration and lack of confidence that the parking spot would be installed at all, and requesting that I agree to shorten the lease from 1 year to 6 months with a month-to-month option following. He even added a subtle threat in the email that he felt it would be best for both parties so that down the road I wouldn't "Incur further costs", which I took to mean, agree to this or I will make your life a living hell the entire time we're here. Af

ter speaking with my lawyer and agent I decided to agree to the 6 month term but with no option for month to month following, because honestly I just want to get them out and hope for better tenants next round.

So...The parking spot was finished today and looked great and I was so happy to move forward and put all of this behind us....

And then I got an angry text from the neighbor saying it's not going to work because the only way that the tenant can maneuver into the parking spot is to first turn into "his portion" of the driveway, which is partially in front of his garage and behind his house, in order to then back into spot. (performing a K turn). So he's essentially claiming that they have to drive onto his property to get into the spot. My argument is that it is a SHARED driveway, and they are never leaving the confines of the driveway during the maneuver.

As frustrated as I am because I feel like I am the mediator between 2 groups of assholes, I can't help but fault myself for not realizing this would be such a problem beforehand and doing my due-diligence to basically say in the lease "No parking in the driveway or on the street, one car must be in the garage and second car is up to you to figure out." I feel incredibly stupid.

I'll be speaking with my old neighbor further about it tomorrow but I don't really have any other options aside from apologizing to him and claiming ignorance because I honestly never thought pulling a few feet in front of his garage in a shared driveway for a few seconds at a time would EVER be an issue. Especially considering that because of the layout of the space, he crosses in front of mine every time he pulls in or out, has blocked the driveway for months at a time with construction vehicles, and because I split the cost of the repaving of the driveway with him last summer 50/50...but I digress. I'm hoping he backs down but if he doesn't I guess the only thing I can hope for is that he can agree to deal with it another 6 months and then I'll make sure that any future renters know that if they have 2 cars one has to be parked in the garage and the other they have to park in the lot down the street (or manage in whatever way they can but it's up to them), but then that means I'm out $2300 for the parking space I just installed.

Anyway, sorry for the long frustrated and ranting post. I'm nearing the end of my wits and any advice is greatly appreciated! Please, help convince me to stick with it..Below is a photo that should help visualize the situation.

JD Martin · Answer

Thoughts:

1. First mistake: agreeing to lower the rent because of tenant demands. You should have given them the option to break the lease and move on or stay as-is. Never, never, never allow the tenants to decide what the proper amount of rent should be for your properties.

2. Yes, you should have addressed the driveway issue in the lease. I would be willing to bet that it's a "shared" driveway because technically half of the driveway is on your property and half is on the neighbor's property. Unless the city explicitly prohibits front-yard parking, I would tell the neighbor that either S/he will get along with future tenants on a reasonable use of the driveway, or I will put a fence directly on the property line on "my" side of the driveway, turn my garage into a storage shed, put a parking pad in the front yard, and the neighbor can now figure out on his/her own how they're accessing their garage and driveway behind their house.

3. This setup is going to be a royal PITA going forward, I guarantee you that. I would take @Jonathan Greene's excellent advise, take advantage of the high market right now there and sell and find something more suitable as a rental property. These kinds of things never work out very well when you have to depend on the good graces of individuals, and you don't want to be a moderator from now until forever between you and the former neighbor.

Matthew Paul · Answer

Put another parking pad in the front yard .

Jonathan Greene · Answer

Here are some good and bad notes for you, but either way, you can learn from it.

1. "We agreed to lower the rent $250 and moved on" was the worst thing you could have done. You should have offered them the chance to move out or shut up. They weren't going to sue you. Most of this goes back to choosing a tenant. Did you use a realtor or where did you find this tenant? Most tenant problems are apparent before hand, but new investors just want to get it rented so they take the first person who will pay.

2. Your neighbor is right and wrong. The driveway part is shared, but if your tenants keeps swinging into their part to pull out, it is a problem and one that should have been checked with them first. But, it would probably be fine if they hadn't been arguing the whole time and when you have a single-family resident and a tenant, the single-family homeowner is always going to be mad that you are renting your home next to theirs.

3. You see the responsibility of this is on you, but what is your best course of action is what you need to ask? I know Montclair, I lived there for 6 years and have a flip in Attorney Review there now, if you can get the tenant to willingly leave, I would sell it. Single-family homes are selling as high as ever now there and there is no reason to keep that as a rental as your rent is probably nowhere near the 1% rule. If you want to invest, get the tenants out, sell and see if you can turn that into two investments.

Theresa Harris · Answer

The amount of time they'd be using the shared part of the driveway to get into the new parking spot should be minimal. It would be no different than when they tried to back out of the garage.

As for them not knowing they'd have to park in the garage, I'm sorry but the tenants are idiots. They can see it is a shared driveway, how much space there is and read signs on the road.

I would tell the tenants this is clearly not working and they are better off finding another house to live in and let them out of their lease. You can then relist it and mention that there is parking for 1 car.

Davartay Miller · Answer

Do not let this one experience ruin it for you! Remember with every resident comes a different problem. In this situation I would be interested to see the land map. It's worth having this information to better serve you, the resident, and or the future buyer.

Best of Luck,

Patti Robertson · Answer

What do you mean by “shared driveway”? Do you mean that one of you owns it and the other has a legal easement written into the deed that gives you the right to drive on it? This is the only way the land could be considered “shared” - and it is shared usage and cost of upkeep, but not ownership. We just had this exact scenario at a property I manage in Norfolk, VA. The owner told us the driveway to be left of the house was tenant parking. This made sense because the house to the left had a driveway on the left of their house. The only odd thing was that the driveway width spanned part of both house’s fences.We had the same tug of war going on between our tenant and the homeowner neighbor. The owner of our house insisted this was never a problem when they lived there. They agreed to let us do a survey and low and behold, most of the driveway sits on the neighbor’s lot, not ours. We only have 7 feet between the wall of our house and the property line, which doesn’t provide room to park any vehicle. You need to pay for a survey. That’s the only way to figure out who owns the driveway.

Colleen F. · Answer

@Chris Green looking at this diagram now I am wondering if the neighbors issue is a concern about backing out of his garage into your tenant because he cannot see them. Despite this being unlikely I had it happen years ago when my landlord backed into one of my professors when he came to pick me up for a seminar. It wasn't good to be me for a few months while they fought it out. I am not sure how you solve that issue. Install a mirror for them?

Scott Stewart · Answer

@Chris Green everyone else above has added great advice to the situation overall, so I figured I'd just chime in with my two cents and a tale of my own experience in finding tenants willing to overlook my less than ideal parking situation that will hopefully bring you some sense of optimism for future tenant searches.

I generally agree with the advice that it might be ideal to take advantage of the market in Montclair right now to maximize your sales price on the current home and then reinvest it into a multifamily property, but I noticed your cash flow numbers above and it sounds like you do pretty well on this property as is. Adding more tenant headaches with having to find two sets of tenants for a multifamily might actually be counter-intuitive for you right now.

As for the parking situation and future tenants, I have a two family house hack in Glen Ridge that is on a main road with only two parking spaces available. To date, I have not granted access to either spot to a tenant & have instead purchased a parking permit for a local lot for them to park in legally. I disclose the parking situation upfront when screening tenants before they even come to see the place and it has certainly limited my overall options, but I can say that with some patience & an understanding that it does likely impact my maximum possible monthly rent I have had great luck finding tenants willing to overlook this small drawback to an otherwise great rental. I don't know where your home is located, but in my experience many of my clients only move here with one car shared by the family - almost anywhere you are in Montclair, public transportation is nearby, so I think you'll be ok finding the right tenant.

Wish you the best of luck in resolving the issue and hope you stick with the real estate investing - the occasional headaches are always worth it!

Colleen F. · Answer

@Chris Green Let them go, It won't work long term probably should have offered them an out to start with instead of a price concession. Also that is big price concession if you got lots of applicants before, you will get them next go round at market rent. In NJ- Montclair should attract a good tenant who can live within the restrictions of the property.

On Screening You can discriminate on type and number of vehicles. You can say no in driveway parking and garage may be use for parking only (I specify no oil change/mechanical work in some garages). For some reason one property I own attracted people with lots of vehicles, they kept calling, they had trailers, motor homes, a couple boats. I started putting in the ad that only 2 vehicles allowed and when they apply I don't accept people with monster trucks. Parking should be evident when people view the property and let them know it is shared driveway but not everyone makes the mental leap that you can't park in the shared driveway so you need to tell them. Good luck with the neighbor. You may find the real issue isn't the tenant driving on their part of the driveway but that a concern over them possibly hitting the garage or house.

Joe Splitrock · Answer

The shared driveway and limit of one car will be a problem with any future tenant. I don't think getting rid of the tenant solves the problem. Very few people have just one car. The best solution is a parking spot in the front yard. It may require digging out some dirt and putting a retaining wall on two sides, but it would be worth it. Having parking adds value to the property. Even if you go to sell the property, lack of parking will be an issue for the buyer.

It is possible that you own most or all of the shared driveway. In fact, it may be your neighbor who is sharing your driveway. Find out where the lot lines are and if there is any agreements in writing.

Just an observation, but you need to be more firm with your tyour neighbor. I would explain that the shared driveway is for your neighbors benefit too, so they need to work WITH you on access to the parking spot. Tell them you have spent thousands of dollars to address the problem and you would appreciate their cooperation. When they say they don't want someone on "their" part of the driveway, quickly remind them that they are on your your part all the time.

As far as the tenant, I think their original grievance was fair. Without being told they could only park one car, nobody would assume one car only could be parked at the property. Your offer of $250 per month rent reduction was more than fair. That combined with the parking spot you added is well beyond what most landlords would do. I would confidently remind them of that. At this point they have two choices:

1. Accept the arrangement and be respectful of the neighbor. Never block the driveway and be careful not to hit their house. They need to understand if they or their guests hit the house, they are paying out of their pocket (not out of their security deposit). If they choose to stay, they need to stop complaining and accept the agreement.

2. If they don't like the agreement, they can be released from their lease and move. You have already modified it to a 6 month agreement, but make it clear they can leave next week if they like. If they choose to stay through the six months, they need to stop complaining. They can't have it both ways, either it is ok or it is not and they leave.

You are trying to make everyone happy, which as a landlord is impossible in many cases. Even if this tenant leaves, future tenants will have conflict with the neighbor, unless you train the neighbor to be more flexible. You can't keep asking tenants to leave because the neighbor wants something unreasonable. If you are unprepared to deal with this, you may need a property manager or sell the property.

Parking is a real concern with rental properties and it is one of the things I consider before even placing an offer. In your case, I think it could be easily solved with a front yard parking spot. That is what I would do. Then you technically have three spots, which increases the properties value for rent or sale.

First rental tenant/neighbor parking issues - should I quit?

First rental tenant/neighbor parking issues - should I quit?

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