All Forum Posts by: Jason L.

A plumber recently came out to my duplex and found paper towel that clogged the toilet in unit 1. The thing is that the drain is shared  by both units, so technically the paper towel could have come from the unit behind them. The unit 1 tenant swears that she didn't do it, and to be honest I tend to believe her because she's proven to be far more responsible than the unit 2 tenant when it comes to paying her rent on time (albeit that's fairly circumstantial). The unit 2 tenant has no idea there was even an issue. Someone was clearly negligent here, however, I cannot prove responsibility and the blockage was found in unit 1.

How would you go about charging the plumber bill? All unit 1? All unit 2? Split?

Plumber sent me the bill (officially) today and he wroe he also found tampons and wet wipes along with the paper towel. Once I saw that, I totally changed course and agreed that this was 100% tenant responsibility. I was going to throw them a bone for the duplex thing, but now it seems far more likely this clog was all their doing. Thanks for the responses to stay the course.

Tenant calls me today to tell me the toilet is clogged. I called the plumber, who after fixing the clog told me that it was because of paper towels being flushed. The lease explicitly states that anything besides toilet paper and waste is the tenant's responsibility. I have had no other issues with the tenant being negligent in the last few months.

However, it should be noted that the unit is in a duplex that is a converted SFH, which means both units share a drain. Therefore, I technically can't prove that it wasn't the other unit who flushed the paper towels, although they did not complain about any plumbing issues to me today.

I'm not really sure which route I want to go down here. How would you approach this with the tenant? Do you pass down the bill? Split it? Give them a first-time pass? I think all 3 options have merit.

I don't think of it algorithmically. Setting rent prices is not like setting the price of a consumer good - say milk - where demand is going to be far more inelastic and generally static over time. In other words, the demand for a rental is going to change every single day. You could absorb every piece of data you can which tells you your 2/2 SFH should get $1200/month, but if you happen to list it at the same time as 200 other 2 bedrooms in your city, then it's probably going to sit vacant for a long time without a price drop. However, if you list it at a time where the inventory on the market is extremely low, then you could list it for $1250 and it'll probably still get snatched up immediately. Unfortunately, that's just something you can't predict. It need to be tailored towards the exact time you decide to list the unit. Check the market and price according to the competition.

The good news is that it's way easier to get an increase on a renewal than it is on a vacancy. Less pressure on the owner to deal with incremental vacancy and more pressure on the tenant to take the bird in the hand rather than move again.

 Thanks, Mindy. Thankfully my tenant has been there for 4 years already and I think we're on pretty good terms, but this info is certainly enough for me to make sure I get the next tenant on Venmo or Cozy instead.

Don't think of it as a binary proposition like "can I get super rich or not?" That's setting yourself up for failure right from the start because most people will never meet such a threshold. Try to approach the ideas from the book more for the prospective of, "How can I make things incrementally better?" In other words, don't worry about if it's too late to acquire 1000 units and go buy a yacht with the residual income. Worry about how you can buy the first unit and immediately put yourself in a better position than all the people who never get past the starting line.

 I have a tenant who pays Paypal as well. It's a great option (as is Venmo), but this issue in this situation is that neither service offers a cash option. It's only useful for tenants with bank accounts that they can link.

I had this exact situation recently. I inherited a tenant who doesn't have a bank account and used to pay rent via money orders. After asking around, the best solution I found was to simply have them deposit the money order into my bank account directly at the bank. It's safe, secure, and most importantly simple for the tenant. Sure, it's not as ideal as an ACH transfer but it's better than cash, checks, prepaid cards, or anything involving the mail.

Note: Paynearme and Propertyware do allow cash deposits but have minimum usage amounts that are untenable for a landlord with only a few tenants.

It feels like your numbers are pretty aggressive here and don't really give you any room to be wrong. I'd be concerned that the back end of your deal is entirely in the hands of the appraiser. If your ARV is off (and it's certainly aggressive to project $60k in added equity on $10k worth of improvements), then you could be veering off track. If the house appraised at $130k and you only had enough on the refi to pay off the HML, then are you prepared to keep your $10k in the deal -- and pay additional closing costs on the loan -- until it's paid back in a few years?

 A word to the wise to only use these as a proxy. I bought a duplex last year. Before buying, I called the city and asked for a 12-month history on the utilities. The average bill had been about $125 with a high watermark of $138 (and yes, that was with both units fully occupied). I've owned the house at full occupancy for 7 months now and my average utility bill has been $165 with a high of $205. Hard to really say why it's been so much higher since I bought it, but it's a good lesson to be learned that, A) always be conservative with estimates (call the city but then add 20% to whatever they tell you, just to be safe), and B) tenants don't give a flying you know about water consumption when they're not the ones footing the bill!