All Forum Posts by: Jonathan R McLaughlin

You are going to present your word as worth nothing and what's more do it over $100 on a 2K rent? And whats your time worth? Greg S. is absolutely right.

And--incidently--how much goodwill would you buy by saying the truth "people are willing to pay more but I advertised it at this and I keep my word"

Don't you want it at the price you can choose from qualified tenants? 

Hi Will,

Like others here I think you are in good shape. One kinda bizarre wrinkle you may just want to check into for SC.

Bats. They are often treated differently then other animals/pests in court because of the rabies potential. In MA, for instance, if a bat is discovered IN a part of the house with access to the interior all folks are supposed to get rabies shots even if they didn't feel a bite because its possible they were bitten and didn't realize it. 

No comment.

Bats in the house can lead to the house being declared uninhabitable in some circumstances, and I know of a recent case where a DIY fix from a landlord was declared invalid the place uninhabitable for that period and tenants got lots of rent back. Check on that in case the lawyer has some obscure reg up his sleeve.

I love the fact that you went full license, exterminator, outside party etc. and had it tested as that should cover you even in the unlikely event this rears its head. 

Now, I'm not ancient but I'm still of the generation where you grabbed the tennis racquet and a pot lid or paperbag and threw it out....:)

I've consistently advocated for a win-win mentality and respect between landlord and tenant but that is different from having one party do better at the expense of the other. I'd agree with the overall tenor of the posts that raising the rent seems not only fair, but overdue. As you proceed, I'd ask yourself a few things:

What do I want from this business relationship? 

It seems you prize reliability, low maintenance and long term occupancy. In addition, these are some of your favorite "clients" so you wish to make life as easy on them as consistent with profitability and your other goals. You have an informal relationship about repairs you are happy with, though many would tell you thats a dangerous road to go down trading work for rent. So far so good.

The tactical question maybe is not "how close can I get to market rate" but "what is market rate for the kind of tenant (these) that I want?" 

On the "what is the real cost to you side" the low maintenance costs hint to me of deferred capital expenses you will have to cover. Also, if tenants have been there a long time, no matter how good, when you do changeover you will likely need updates, etc. to get the so called market rate.

So I'd choose the price that allows you to continue the type of tenancy you have, then phase it in. 5% a year isn't a shock to a budget in the way 10% is. 

I would not ask them, I would tell them. You are likely to cause much more hurt and bad feelings (and therefore damage to the business relationship) by asking permission. You said 80$ is reasonable and even on a landlord forum some people went "yikes, too much", so the tenant is likely not to have the same take on things as you do. 

In a way, asking them permission is actually being less than respectful of their position as tenants. "So the rent is this but since you can't afford it I won't do it because I'm a great person". It feels good to you but in a way you are making them crawl before you to keep their home. It might not feel so good to them.

Figure out what you need then inform them--nicely--you are going to charge it. Do tell them your goals of keeping it low/below market because of how much you value their tenancy and their respect for the property. If they have an objection you find valid deal with it then. 

I do respectfully submit this is about your comfort zone, not ethics. You want more money. You feel your price is too low even for the low maintenance tenant model you have. Own that and weigh it against the good things you have at this price point.

I have found that business which tend to be the most ethical and best to deal with are the ones which say "this is our price, its fair, and it is what it is." 

Good luck and would love to hear how it goes. You have clearly done a great job of getting great tenants.

Hi drew, I don't get 2-3 years at all, what ami missing? 175 a month x 12= that's 10 years. Even counting equity I don't see 2-3? Your return will likely be a favorable refinance or exit to an owner occupant. I'd look at % of owner occupied as that's a major deal for those buyers to get financing. We had a condo purchase at similar price and rent/hoa. It cashflowed similarly but we bought it low enough to profit substantially on resale. In retrospect we used up all our cash flow margin and then some with our rental estimates, so be careful. Still feels light unless it's a great area.

Are you sure you can do 20% down? 25% on investment condo is more the standard. 

Lots of smart people on here don't like condos as investments, though I think you can do alright if you have a great location for solid tenants. 

This seems light on the return. Is this an area on the upswing? Is the purchase price substantially lower than comps for some reason (short sale, etc?) Special assessments coming? How did you get the 1500 in rent? Whats the cost of the rent vs. owning something similar? How many years to recover your original investment? 

most people who are serious don't threaten lawsuits, they file them. Lots of bark here but I doubt there is a bite

The Boston market has been hot enough lately this is actually a common scenario, as the sellers are setting the price and letting desperate buyers bid them up. Sometimes the price is on the lowish (ha!) side to generate interest.

You do have one other option available, the most aggressive, which is to offer an amount over asking but on the condition they cancel the open house. We did this on one, I think 10% over asking and the value went up by over 100K in a year. It put the onus back on the seller as they start thinking "well, how much better are we really going to do?." Especially if you are actually prepared to walk away. We did great with it in an area and time of rapid appreciation. 

Price and value not quite the same thing. Are we talking 5-10% difference on a 200K house or an 800K house?

You certainly want to be sure of your ground if you go this route, but it could actually be cheaper for you in the long run. I'm not sure this house rises to that standard from your description but again, its an option. 

former owner occupied landlord turned commercial and court mediator including landlord/tenant issues I think some of the advice here  above puts you off on the wrong foot.

I'd suggest taking a step back from assuming they are a problem yet. Based on what seems to be a text and a follow up, yes?

Parents to a kid who just started walking? Having been one recently I can testify that they are likely sleep deprived, anxious over kids sniffles, and exhausted from moving in.

Are they concerned about lead or other contaminants? We live in a world where some people freak out over non-organic food for goodness sake.

If they don't know construction and its an older house they might be really scared about their kid being exposed to something.

You know you are a good guy, but they don't know that yet. Probably worried about other things breaking and handling things in general too.

"A soft answer turneth...". 

Here is your cheapest and most likely to succeed option:

Outline for them that its a purely cosmetic problem, give them some evidence thats true, assure them you know its not their fault and they won't be billed, let them know you will fix the cosmetic/falling plaster etc. issue on a reasonable timetable. Ask if there are any other concerns. If they are super nervous and sincere, follow Greg S.'s advice - the "you are responsible" part. You can always bring that up later if needed. Send a written follow up recapping the conversation.

If they are reasonable people this will likely calm them down and you get back to what you described as a "great" situation.

If not, you have spent at most a half hour and no money, and all of the options mentioned in the posts are available to you. Not to mention you have the added bonus of a written record showcasing how responsible and reasonable you are.

Jon

Woops, that was a long post to misread a situation! My error not to catch the "I said we do not provide washer dryers with the unit"--still some ambiguity there as written but if she was waiting till you were away thats is a different scenario.

My apologies to all and I hope the post is still useful as a thought experiment for landlord tenant communication.

My own actions would probably go along the lines of the previous posters of offering to allow her to do laundry and do new (maybe used) machine for $25 or so amount in rent, laying out conditions of use. You would make it back pretty quick and if its a decent neighborhood its definitely a draw.

Hi Mark,

Wow, I think some of this advice is not at all helpful and I think you are on the verge of creating a problem where none exists. 

I would urge you to not see her as the villain, but this whole thing as a situation arising out of a lack of communication. That takes two people and as the one running a business I'd suggest you may need to own it more than her....

I'm a former live in landlord of a duplex, turned more hands off commercial investor. I also do some housing court mediation. I see this kind of stuff ALL the time and a mutually good situation is often damaged for so little reason. She is a good tenant, you are a decent landlord, so ask yourself how you got to this point?

I'd put yourself in her shoes for a moment: she rents a unit in a duplex, (it sounds owner occupied, yes?). In the duplex basement is a working washer and dryer and it sounds like you never had a discussion about it one way or another, and whatever documentation you have doesn't explicitly mention it.

Isn't it perfectly reasonable for her to think that a basement washer/dryer is included in the overall rent and there for the use of both units? You never said otherwise? Isn't it reasonable for her to think if you took it away you would be diminishing her quality of life for the same rent? You may not have made the same assumptions but everybody fills a vacumn differently. She isn't thinking about your business and likely has no idea you feel you have a case for resentment.

You say it works "intermittently" and you never thought about it. What makes you think this was on her mind at all. She moved into a place with a working washer and dryer there for use. If you charge her she would see it as raising her rent, if you take it away she gets less for the money. I can even see her being quietly resentful that it doesn't work well--why doesn't the landlord take care of this place? 

Is she right? Are you right? Does it matter?  You don't have to assume she is an unreasonable person. If you assume she is being reasonable (in her own eyes) would this alter your actions and your "don't want to be taken as a fool" perspective? 

So thats the mediator in me and I hope that stuff is useful to reflect on as you decide on your own course of action.  You have the right to do anything you want subject to your lease and laws, of course. As smart people on this forum have said: "do you want to be right or rich?"

My own opinion FWIW is that you would be well served to keep as is, especially if you live there and she is a good long term potential tenant. You could of course go and say the water and electric usage is eating into your budget and you need to up the rent by $5-10 to cover it (if she is month to month). I would personally just factor it in for a rental increase at a natural cycle and see it as a feature of your rental. 

Good luck, would love to hear the outcome.

Jon