All Forum Posts by: John T.

He doesn't meet your tenant selection criteria.  No credit score.  Just move on to the next potential tenant.  

Yes and yes.  If you knew that the branches might fall and cause damage to your neighbor or his property and you did nothing, then you're negligent.  If you didn't know, then you are negligent in failing to properly inspect your property to discover trees and branches that were likely to fall and damage your neighbor and his property.

Quote from @John Lunias:

Background:

Hi,

I own and live in a two family home where I rent one of the apartments (above mine) out to a small family. The apartment is a renovated 3br, 1 bath in northern NJ with heat and hot water included. Their 2yr lease is almost over and overall they have been pretty good tenants (they are our first ones!). 

When they signed the lease we gave them a $50 discount for a 2yr vs 1yr duration, and managed to have them not pay the brokerage fee (saving them $2150 or a month's rent) when they decided to sign. Flash forward two years later and the lease is about to expire and we're on the fence about raising the rent of not so looking for others with no bias to weigh in. 

Here's why I think we should raise the rent by $20-$70 a month:

-Originally they moved in as a family of three (Father, mother, and small child) but they then moved in their mother without specifically asking for permission (they said she was going to stay awhile). Only real expense is water but she can be annoying as she smokes and goes inside and out often. 

-They refuse to lock the common area doors (front door, and door to basement w/ laundry) - I've asked them a few times. The grandmother and son both smoke and I think they are just lazy to lock doors even when they retire for the evening! I purchased electronic self locks but they were about $200 a pop!

-They sometimes leave the windows open, even if its really cold (20-30F)! This is really annoying. I did tell them about it and they drastically reduced the times they did this but do see them still do it once in a while. They are of Asian descent and I think in their culture they like to have fresh air, especially while cooking which is understandable as their kitchen does not have an outside venting fan. The heat is included in their rent so I see it as my money flying out the window and contradicts something below.

-Our utilities and tax expenses have increased, plus their mom coming adds more water usage but I Imagine its just a few dollars a month.

Here's why I think we should NOT raise the rent:

-They have never missed a rent payment.

-They are decent people overall - quiet with the exception the doors slamming once in a while and heavy footsteps on the stairs (but that's more the fault of uncarpeted stairs). No arguing, yelling - we hardly hear them when upstairs except for an occasional kid crying or mother yelling. 

-We have been friendly and exchanged gifts for their child and ours. 

- They have had to buy a portable A/C unit to cool rooms without wall A/C

-Their living room is cooler because of its high ceiling, 3 outside walls, and radiators that do not heat up as hot due to being in the end of the "line", so they use a radiator heater to supplement heat and have mentioned it is cold (which is true - by why leave windows open then?)

Compromise?

One idea is to offer the same rent (no increase) in exchange for another 2 year lease with an understanding to remedy the above. If they elect to stay for one year, we would increase the rent by $50-$70 as we feel that would indicate they plan to leave soon. They also have use of laundry in our basement at no additional cost. No off-street parking is included. Its a 3 bedroom, 1 bath, upstairs apartment in Northern NJ. 

Is $20-$70 a month worth annoying a mostly decent tenant who can become annoying or have resentment about the rent increase? My worry is they could easily get annoyed which can backfire on our quality of life and become resentful. 

What would you do? 

I like Rentec Direct. It does a lot more than collect rent.

I like Rentec Direct.  It does a lot more than collect rent.

All you need is one account and good accounting software.  Each rental property is set up in the accounting software as a "class."  As income comes in and expenses go out it is assigned to a specific property or class.  That way you can keep tract of each separate property, but only use one account, one check book, etc.  QuickBooks (desktop or online) is a good choice for accounting software.

@Pamela Winslow Start with two bank accounts. One account is the Operating Bank Account and the other is the Reserve Bank Account (i.e., a Bank Savings Account).  

All income and expenses go into and out of the Operating Bank Account.

Reserves (as discussed below) are transferred out of the Operating Bank Account and into the Reserve Bank Account. When the reserves are needed, they are transferred back to the Operating Bank Account so that the expense may be paid out of the Operating Bank Account.

The Reserve Bank Account includes sub accounts set up in your accounting system for the following reserves:

Property tax reserve (fund this account monthly with 1/12 of the annual cost property tax expense)

Insurance reserve (fund this account monthly with 1/12 of the annual cost of insurance)

Replacement reserve (fund this account monthly in an amount to set aside sufficient funds to cover the rental property's anticipated [inevitable] future capital improvement expenses).  As a side note: The cost of simple repairs and maintenance is paid out of the Operating Bank Account.

Other Savings reserve (fund this account monthly with in an amount to cover contingency matters, such as vacancies, etc.)

Security Deposit reserve (transfer all Security Deposits to this account).

Other reserve accounts may be set up for other matters, such as Tenant Rent Deposits.

To clarify matters, there is one Reserve Bank Account.  The sub accounts (Property tax reserve, Insurance tax reserve, etc.) are not set up at the Bank.  The sub accounts are set up in your accounting system.

You can use a simple Excel spread sheet to do your accounting or you can use accounting software.  I use QuickBooks.

I require that my Tenants have Renters Insurance with personal liability coverage in the amount of $300,000.  When your tenant negligently burns down you $250,000 rental the Landlord and the Landlord's insurance company will be happy to file a claim on the Tenant's Renters Insurance.

True story:  I just finished re-building a $220,000 rental house due to a fire.  The Tenant negligently caused the fire by weeding the flower bed with a propane torch.  His Renters Insurance paid for the damage; not my insurance.

I use the following tools for managing my rental property business:

• iPhone for phone calls, contacts, calendaring events and texting
• Desktop computer with MS 365, including Word, Excel, etc.
• QuickBooks for accounting
• Rentec Direct for property management, includes online rent payment site and all the tools necessary to manage and rent all your properties. Rentec Direct also has an accounting system.
• Two Bank accounts - Operating Account and Savings Account (Reserves)

You need to speak with a lawyer.   I believe that if you and your predecessors in title have been driving from the public street down a road or path and onto your property, then you might have a prescriptive easement (defined as:  an easement upon another's real property acquired by continued use without permission of the owner for a period provided by state law to establish the easement). 

See a lawyer.  You can resolve this through litigation.  You might even be able to resolve the matter by agreement if the opposing party wants to avoid the cost of litigation. 

You should consult with a lawyer regarding this issue.