All Forum Posts by: Mila F.

Thanks, @Natalie Kolodij

I stumbled over this thread from a few years back on DMSH election for costs incurred prior to placing a property in service. It was a heated debate with no consensus:    https://www.biggerpockets.com/...

What's the interpretation of the codes/regulations today? Can pre-service costs be expensed if they meet the $2,500 threshold? The RE tax professional helping with my returns says it's ok. My gut wants to verify. A bit hesitant to expense most of the rehab costs this way.

@JD Martin, thank you for your response, I only wish I saw it sooner. By the time I read it, I already had a lease extension signed (at double rent). I do like the idea of signing a new lease and then going through early termination when the time comes. I'll keep this in mind for future situations. 

In general, there is a lot of wisdom in your post, particularly on landlord-tenant relationships. Thank you for this perspective, it's helpful.

I wish I could show the place while still occupied. Not this time. During the three years living here, these guys never made an effort to decorate or furnish the place to make it look like home. It's just unattractive and would likely discourage the quality of tenants I'm targeting. I'll have to wait until they move out.

@Josh Young, @Theresa Harris, @Nathan Gesner - Thanks for the advice, this is helpful.  I'm leaning now towards accepting their double rent offer, and just conditioning the extension on them allowing us to do some repairs while they are still occupying the property. This way we can cut the time needed to get the place rent-ready.  

In terms of the peak season being questioned here - this neighborhood is zoned to top-notch schools and is highly desirable among families with school-age kids. However, schools start here early - on August 1, and most rental traffic takes place here during late spring-early summer. Families who are responsible and plan their moves  ahead of time (basically the type of tenants I want) tend to have a new place locked in by July.  

Would you guys agree to extend tenants' lease by six weeks (until early July), knowing this makes you miss the peak rental season in this specific area? And knowing that in this case you'd be marketing your property at the same time as your next-door rental, thus having two properties  competing for the same high-caliber tenant pool?  And knowing that you'd have to wait with the showings until the tenants move out and the place is cleaned up, because otherwise it is not presentable? 

And if you don't agree to extend, you'd be subjecting a family to a significant logistical nightmare. They would be moving to another state in July, but can't leave earlier since the husband has to finish his medical residency first. If I don't agree to extend, they'll have to put their belongings in storage, find and move into a short term rental for the remaining medical residency term, while also shopping for a place to rent in another state. This is difficult. 

We had these tenants for three years. They pay on time and generally were good, but they did start a bit of a drama last month that required us to consult with an attorney. All good now, although the aftertaste remains. 

We explained to them that lease extension this time of the year would hurt us. In response, they offered to pay double rent for June. I'm scratching my head. The extra month of rent would definitely help, but missing out on the main tenant demographic for this area (families with school-age kids) is still worrisome. My husband is absolutely against extending and insists we should think about ourselves first. 

What would you do if you were in our shoes?