All Forum Posts by: Craig McCarter

I have a tenant that has been in my home for almost 6 months. By all accounts they have been great tenants. They keep the home clean, pay rent a week early, and I haven't been called out to fix a single issue. They are a young engaged couple, and we actually have a few acquaintances in common (a connection we discovered when they were moving in).  He just informed me he got a job in another city and may need to break the lease early. The lease says in this situation the tenant owes the total balance of the remaining term. But that feels a little harsh. I am pretty confident I can fill the vacancy immediately, and probably charge a higher rent as well. This would be close to a $15K penalty. I try to stay on good terms with people as word of mouth can always come back to bite/help you, and generally try to treat people with what feels right/fair.

I was thinking I charge a one-month penalty for breaking the lease, and they continue to pay rent until the unit is filled. Basically I get one month of additional rent for my troubles, and the rent is paid in full throughout (either by them or the new tenant)

Am I letting them off too easy? anything I may not be considering?

Thank you all for the insight!!

I have one rental property - a house that I used to live in for 5 years. Each of the past tenants have been great and I have been very transparent with them - we're looking for the right fit, someone that will take care of the place, not be a headache, etc. Basically out of all the people that were interested, I have chosen the people I liked/trusted the most. 

The unit is coming up for rent again soon and I'm wondering if I am opening myself up for a claim of discrimination with this process - where a tenant who is not chosen could claim that I rented to someone else based on their (fill in the blank of protected class)?

Any tips on how I should potentially navigate this differently? but also, I really like being able to hand pick my favorite from a pool of applicants. 

Thank you for all the helpful replies!!

Hello,

My tenants in a long term rental are going through a separation. I've been hearing from both of them, and I keep telling them that I can't get involved, and they need to work it out amongst themselves.  The female moved out, and has asked to get off the lease. I have told her that they would need to reach some sort of formal agreement, that I cannot take her off the lease without his consent. That would be me getting involved, and I can't get in the middle of this. 

The husband has stayed in the property and will continue to pay the lease. In our last conversation he told me that his attorney advised him to change the locks. That sense she moved out, she has to go through the sheriff to return to the property to get her things, etc. I am really trying to stay out of this, and I would be comfortable with him staying there for the duration of the lease .. but now changing the locks?!?! That feels like I could be getting myself in the middle. 

In the lease, it doesn't cover this specifically. there is a section that hold me harmless if I need to change the locks to restrict one tenant due to a court ordered restraining order .. which this doesn't qualify for. 

Am I running the risk of violating the lease on my side  (failure to deliver the property?), or winding up in the middle of this domestic dispute if I let him change the locks? There is 8 months left on the lease. 

thanks in advance!

@Buddy Holmes

Thanks, Buddy! Good points. Yes, my wife and I both have good 401K plans that we are putting in more than our match. I have an IRA, but a few years back I started putting that towards saving for real estate. So just letting that grow for now.

Hi BP Forum,

I am new to the BP community, and am interested in any feedback you may have. I currently have one rental house in Charlotte, NC. We lived in the home for 4 years. during that time we were able to save enough for a down payment on a house to fit our growing family, while staying in our beloved neighborhood.

The question I am struggling with is, should I sell and cash out of this investment while I can still claim the primary residence tax exception?

some details:

The home cash flows approx. $2,500/year when factoring all expenses. If I were to sell today I stand to pocket around $165K, and if I renew my tenants for another 12 month lease I would expect that to go up to around $180K or more next year (that would still keep me in the 3/5 tax window). My plan is to reinvest the money to expand my portfolio. This seems like a no-brainer in some ways, but a few things are holding me back - It's in a great neighborhood that is appreciating rapidly, with steady demand from high-quality tenants. It's 2 blocks from my current house so it's been super easy to manage. If I cash out and re-invest I will almost certainty need to buy properties that are much further out from town, increasing the time to manage, or possibly requiring a property management company. There is a little bit of an emotional component too because we had both of our daughters while living there. This neighborhood is only getting better, and fast, so why mess with a good thing? On the flip side, this seems like a way to quickly level-up from one unit to multiple. Go from a true amatuer to a semi-pro :)

Am I crazy for even considering not taking the tax-free steak money and laughing my way to the bank?

Thanks in Advance!