All Forum Posts by: Account Closed

Bryan 

When a tenant does damages and you pay a handyman or anyone to do the repairs and intend to make the tenant pay you back, it is never considered INCOME.  It is a REIMBURSABLE BILLING and is done on the bill or check that you type up in QuickBooks through the Vendor Center from the bill you received from your handyman. 

The reason you do this as a REIMBURSABLE BILLING is due to the fact that it is not INCOME.  You don't want to be put into a higher tax bracket at the end of the year due to you entering in this payment as Income when you really didn't make that money.  You paid for the repair and the tenant paid you back.  It is a wash.  

If the tenant never pays you back then the repair becomes a normal expense account, and of course, you don't have any money because they never paid you so in this case you wouldn't have to worry about you being thrown into a higher tax bracket. 

Once again it must be done as a REIMBURSABLE BILLING.  You would do this for NSF Fees due to tenant's bouncing a check and the bank charging you a bounced check fee.  You bill the tenant and they pay you back.  That money is not considered income.  

We never want to say we made more income then we actually did.  Who wants to pay more taxes at the end of the year when we never received this money as income. We paid it first, they paid us back.   

It would take too long to tell you in great detail how to do this and I apologize for that. 

Also, Victor is correct  as to how to deduct it, but there is more to it than that as well. 

Nancy Neville

Hello Sylvia:

I am a true believer in making money and making money comes in many forms.  Monetary and "TIME". 

My method is all about "Training" my tenants.  Teaching them that a Lease Agreement is a legal contract with a start date and an end date and actually has a rental due date. 

It was nice receiving $25 each month for late fees, but the time I spent on supplies to prepare for the eviction process, e.g., The Notice to Quit, the Summons and Complaint and then having to go to court, and the filing fee's involved, etc., was costing me more in TIME (and money for forms) than the cost of a postage stamp or an envelope.  (In today's world you can send them a bill via E-mail in QuickBooks, so no stamps or envelope needed anymore if your tenants have a computer, and I don't know of any tenant who doesn't.  

I chose tenants who paid their bills on time.  So it wasn't like I was training them to pay their bills on time, but to actually show them and get them to recognize that their rent does actually have a  due date.  That is what is lacking in our Industry today, we don't treat it as a business.

Therefore, the cost of postage meant nothing to me or to put the bill in an envelope and send it out. 

Success in this business depends on how much of yourself you are willing to put into the company.  Everyone seems to look for the easiest way to do things, which usually ends up being a no-win situation when it comes to proving your case in a court of law.  

Your question about the MAIL SERVICE in your area sounds as bad as mine.  When we receive our mail who knows.  Many complaints filed against our post office but nobody seems to care.

To get around this problem I starting using STAMPS.COM.  Let me tell you, this online postage program keeps a record of not only the date you purchased the stamp but also the time you bought the stamp, along with the address you sent the mail to.   When I needed evidence that I sent something to a tenant, I printed out my Stamp History and gave it to the Judge,  and that always made them look at me in high regard because I always had evidence to back up everything I did, and my little helper was STAMPS.COM 

I hope this has answered your question.  It was a logical one and I'm glad you asked it so I may share my reasonings with others who may have also had the same thoughts. 

Nancy Neville

Soh, I did some research on this subject and found this.  I hope this will help.

Quickbooks display issues on high resolution displays

This article provides the information on "QuickBooks display issues on high resolution displays".

QuickBooks display issues.

Users of Intuit QuickBooks have reported difficulties using the application on systems with high resolution graphic displays. (1920 x 1200 screen resolution and higher to include 4k and 5k displays).

Symptoms may include any of the following:

• A transaction form does not fit on the screen.
• The sizing icons at the top right of a window do not appear.
• A field overwrites and hides its label.
• Missing buttons.
• Screen is distorted when you maximize or minimize it.
• The fonts are too big.

The reason for this is that QuickBooks is designed and codes for the Default Windows dot per inch (DPI) value of Smaller-100% (96 DPI). Many systems with high resolution displays now ship with DPI settings of 125 to 150%.

Solution.

Intuit has listed two manners of compensating with this issue.

• Set the Windows DPI to Smaller 100% (96 DPI)

NOTE: Reducing the DPI setting will make text in Windows smaller as the DPI is lowered.

• Change the properties of QuickBooks

1.Right click on the icon for QuickBooks.

2.Left click on Properties.

3.Left click on the Compatibility tab.

4.Check the box next to Disable display scaling or Disable Fullscreen Optimizations on high DPI settings.

5.Click OK.

6.Open QuickBooks and check to see if the windows are visible.

NOTE: If the user continues to have issues with their QuickBooks installation, refer them to QuickBooks technical support.

REFERENCE:

QuickBooks Knowledgebase Article ID HOW13289 - Correct QuickBooks display issues

Article ID: SLN297931

Last Date Modified: 09/20/2017 12:30 PM

Having trouble knowing whether or not you paid a bill? No problem in QuickBooks. (Screenshot may vary depending on the version of QuickBooks you own. This is taken from version 2014)

Click on “Edit” from the upper taskbar then click on “Find” from the drop-down menu.

This window will appear. It is here you will choose what you want to search for from the menu list that pops up.

Let's see if we can find a bill that we paid.

Choose bill from the Transaction Type Field window.

You can choose to search by Vendor, Date, Reference # or an amount. Let’s click on the little arrow in the “Vendor” field.

Let’s see if we entered a water bill for our property at 7778 Archdale Street.

Choose “Walled Lake Water Dept.” from the drop-down list.

Click on the “ Find Button” to your right.

There it is! You could have searched for the amount of the bill and would have achieved this information as well by searching for the amount instead of by name. Many ways to find if you paid a bill, if a tenant paid an invoice, to find a specific check you wrote and more!

We see we entered the Bill for the water bill we received, so, let's see if we paid it.

Choose Check from the Transaction Type Field, then type in the amount you are looking for. Click on Find.

When that check appears, click on the “Go To” Button to the right in order to see the actual check.

We now see that we paid it with check #1 on February 4, 2014

But this was a Reimbursable Bill. Did the tenant ever pay us back?

Let’s do a search by Invoice to see if the Tenant paid us back.

There's the transaction. Let's click on the "Go to " Button and see the actual transaction in play.

Yep, it's been paid. QuickBooks has marked it paid as well.

Billing Your Tenants for Rent

RENTS DUE ON THE FIRST OF EVERY MONTH!

It took about a year for me to develop a plan. Tenants were paying their rent any time they wanted to during the rental month. Since I handled my own court cases and owned a lot of properties, I spent a lot of wasted time, typing up the Quits, the Summons and Complaints, to only have the tenants pay their rent just under the wire.

My husband would always say, well just think of it this way, we’re getting extra income. ($25.00 for late fees every month) and true we were, but I also worked on the houses, fixing them up, painting garages, handling court cases, solving tenant problems and more. And it just wasn’t worth it to me to go through all that work, worrying about whether or not a tenant would pay, whether I’d have to go to court, and if so, a lot of time preparing my case, (making copies of all their leases etc) to have them pay after I’ve typed everything up. Plus I didn’t want to be in court every single day of the month. Gosh, somewhere along the way, I needed a life!

So I made all rents due on the 1st of every month, and I would pro-rates rents in order to get all of them due on the 1st of every month. My lease agreement stated that if rent was not received in my office on or before the 1st of the month, then their rent was late and they would receive a Notice to Quit for non-payment of rent. And if rent was not received in my office on or before the 5th of the month, they would receive a late fee bill for $25.00.

So I set up QuickBooks® to automatically bill my tenants for rent that is due, 10 days before their rent was due. (I figured if my vendors send me a bill 10 days before the bill is due, then why can’t I treat rent as a bill and send it to my tenants 10 days before their rent was due). So I tried it. And, low and behold, the next month mostly all my tenant's rents were received in my office on or before the 1st.

You see I chose tenants who paid their bills on time when I qualified them for my rentals. And because most landlords haven’t done anything about rent coming in late, tenants just accepted that as being normal, not realizing that paying rent anytime during a rental month was not okay, therefore, they didn’t view the rental contract as a legal contract that actually had a due date! So when they received the bill in the mail for rent that is due, and it clearly said so on the Invoice that it was a bill, the tenants viewed it as a bill and rents came in and on time.

The few tenants who didn’t pay on or before the first and received the Notice to Quit the next day, (the 2nd of the month) would call my office and rant and rave about it. And, I would just tell them, to not worry about the Notice, it’s just to let them know that I haven’t received their rent yet. And, that it doesn’t become a legal document unless they don’t pay their rent which definitely had to be in my office on or before the 9th of the month or on the 10th I would have to file the Notice to Quit in a court of law.

I told them that in actuality it helps them to see that if they did pay their rent, that I haven’t received it yet and gives us time to find out what happened to their money. If they said they mailed it, I would ask for them to send me a copy of the check or money order.

Those tenants that got tired of receiving a Notice to Quit on the 2nd of the month, began paying their rent before the 1st because they didn’t want to receive that dastardly Notice to Quit. Therefore, it was a win-win situation. And I lived happily ever after.

Just a little tip.

Nancy Neville

When we are little we say to others….”When I grow up I want to be a….”

Doctor

Lawyer

Banker

President

Etc.

Then when we grow up, we realize that in order to be all the above we need to have a plan. We just don’t happen to be a whatever- we- want to be just like that. It takes a plan.

Do we attend College?

How many years?

What college?

Do I need a college degree?

Where will I get the money to fund my dream?

Yet in the Landlord Business (our Industry) people don’t view it as a business. The media, courts, tenants, family and friends, feel we are just money hungry people who care nothing about our tenants but only the money. Do they say that about Bankers, Grocery Store Owners, Doctors (well maybe doctors..bad example) plumbers, etc? Not so much. They view these industries as companies, businesses, but….. not us. And even some of us DON’T VIEW OURSELVES AS A BUSINESS!!!

I have people contacting me all the time wanting me to help them solve all their problems because they didn't have a plan. And, I try to help them as much as I can, but there is only so much I can do. Which lead me to writing this blog.

Many investors, see a sale, hear about the landlord business from others, and they get excited and so they buy a house. But they don’t know anything about being a landlord. And...most of us fit into this group, when we first began as well.

So here is my tip for those who need, want it, and glad they have it. So...here it is.

1.Location, Location, Location .

2. Check out the neighborhood before you buy. Is it a money maker neighborhood, or a bad one?

3. Check the area to see how much rent you can charge for this home in this particular area.

4. As a Realtor, when I sold properties to investors, I would tell them, from my own experience, how much money they could get in rent for this home. In return they would ask me….”Well what if I did this to the house and that to the house (spending thousands of dollars in extra’s to the house), how much could I get in rent then”, and it never ceased to amaze me, how they looked at me when I told them that they would still get $750.00 a month. They wondered how they could still only get $750.00 a month when they spent so much money on extra’s to make the house super special! The answer is this. Location, location, location. What is the market value in that area and neighborhood! It is just like buying a house. What is the market value in that area? What are they selling for?

5. Check your Landlord/Tenant Laws before you even buy a home! Very Important

6. Sit in some Landlord/Tenant Court Sessions to see what goes on.

7. Study the City Ordinances of where your properties are located. If you don’t …..be prepared to receive several tickets for things you didn't know your tenants were supposed to (you really since you are the landlord) do.

8. Get your OFFICE ORGANIZED!! I can’t believe how many investors are so focused on buying and not how to KEEP THEIR PROPERTIES or KEEP TRACK OF THEIR PROFIT AND LOSS. You can't possibly do that if you are not Organized or have an Organized Office!

9. Therefore setup a good filing system

Get a good answering system…Vonage Phone is one good example

Stamps.com is great for keeping track of letters you send your tenants.

QuickBooks is a Landlords best friend. Buy it and learn how to use it.

10. Keep in mind that this is a business of people management. You must get a feel for people and their personalities.

11. Learn what words are Legal to use in advertisements. There are many no-no words. (See my blog on What you can say and not say) to avoid discrimination lawsuits.

12. Learn how to setup your properties to have good curb appeal

13. Learn how to do open houses. Plan for them. Makes applicants excited. Competitive

14. Prepare a legal and good application form. Set a criteria for qualifying applicants.

15. Prepare a legal and good Lease Agreement. Take pictures of the home prior to renting it out and have that day's paper somewhere int he picture to depict that the photo's are current.

16. Setup a website Wordpress.com is free to advertise your rentals- generates interest.

17. Learn how to screen your applicants.

18. Learn how to do a credit report and read them

19. Learn how to choose a tenant. Beware of Testers How you speak, words you use, how you choose an applicant will make you or break you. There are testers. Do things right and you won't have to worry.

20. Don’t allow applicants to pay for their application fee by check or money order. They can cancel the checks or money order if they don’t get the place.

21. How much money do you charge for an application fee (Credit Check) $25 per person is what I charged. If they qualified I applied it to their move in fees. If they didn't qualify, it was non-refundable. Have that on your application form.

22. Only accept cash or a Cashier’s Check for credit checks and if you choose them as a tenant, make sure only cash or Cashiers Checks are acceptable, Otherwise they can stop payment on checks and money orders once they move in. PACIFIC HEIGHTS!!!!

23. Don’t allow tenants to move into the property unless they have rent and security deposits PAID IN FULL!! NEVER give anyone the keys until you have all move in fees, money due you in your hands and utilities (if they are to pay them) placed in their names.

24. How much Security Deposit can you charge. Believe it or not, your State has a law for that. Michigan is one month and half plus first month rent. What does your state say?

25. If tenants pay for utilities. make sure they have them placed in their names on the day or prior to the day you sign the lease. Call the day you sign the lease to verify that has been done. If not, DON'T RENT TO THEM, they do not follow instructions.

26. If you are a Property Manager, make sure you are a Broker, or work for a Broker who does Property Management. About 3 states say you can be a Property Manager and not work for a Broker if you a Licensed Property Manager, not a licensed Realtor or Salesperson.

27. If you are a Landlord and have a Property Manager, either let them be a Property Manager 100% or you handle everything yourself, but not do both

28. IMPORTANT: Learn the forms of your STATE !

How long do you keep your paperwork, your leases? Tenant files?

What is a Notice to Quit?

What is a Demand for Possession?

How many days does your state law require you to send that Notice to Quit?

What is a Termination of Tenancy?

How many days does your State law require you to dent that Termination of Tenancy?

What is the difference between a Notice to Quit and a Termination of Tenancy?

How do you fill them out?

How many copies do you need?

How much do they cost?

What is a Health Hazard Eviction?

When can one be sent?

What is a Writ of Restitution

How do you fill out all these forms

How many days are required for the process

How do you handle an eviction in general?

Do you change the locks on the tenants…ABSOLUTELY NO!

How do you handle a tenant who hasn't paid their rent?

How do you handle a tenant whose lease has expired?

How do you handle a tenant who won't move out

How do you handle tenants doing damages?

What type of Pets are legal rental pets?

How many people can live in a house

What to do with too many Guests in the rental home?

Unknown people on the lease?

How do you evict someone, not on the lease?

How do you handle tenants doing drugs

How do you handle noise complaints

How do you handle vehicle violations

How do you keep a tenant long term? See my blog on The Tenant Phase

To be a successful landlord, and maintain that excitement that you had when you first began, before you knew the ropes, you have to have all this in place, and you MUST AT ALL TIMES STICK TO THE RULES OF YOUR CONTRACT, YOUR LEASE AGREEMENT. Stick to the rules, and you will keep that excitement. You will keep not only your tenants happy, but you will be happy, making your family happy, and that’s what makes landlords still be landlords after 30 years in the business.

Nancy Neville

Are we being Realistic?

Are we being reasonable to think that when a tenant moves out that the rental home will be neat as pin and clean throughout including cabinet tops, behind refrigerators, top of door trims and window ledges? Is that too much to ask our tenants since we rented out the home this way?

When landlords expect this to happen when a tenant moves out, (it's okay to hope, but not to expect) then they are missing what this business is all about.

This is a business of fixing up a rental home, renting it out, evictions and damages and starting all over again. And if a tenant was good.......we were lucky...... or maybe we were professional in how we handle our business. and it paid off. And, if a tenant left the unit clean, then, hot dog, because that is very rare.

I can see charging a tenant for cleaning if they just moved in and left within a couple of weeks for some reason and left it greasy, grimmey, and filthy. But not after a year or more!

Many new investors make the mistake of thinking that once they fixed up the house, and it is squeaky clean, then they don't have to do it ever again. They feel that for the rest of their landlording career each tenant will clean the house for the next tenant, but that philosophy is only a fantasy. I've rarely have ever seen that happen!

When a tenant moves out, especially after a year, it is the landlords job to clean the home, to paint the home, to take care of repairs that are caused by natural causes, and to get it move in ready again for the next round of applicants.

Many landlords don't take into consideration the amount of rent they have made from a tenant which would pay a maid to clean the home (or yourself) after a tenant leaves 100 times over!

When we stay at a motel, on vacation, our kids make a mess of the room. (Swimming Pool), Towels left draped over a tub in the bathroom, beds not made when we leave. Cigarette Butts in the ash trays, you name it, it’s done to the hotel/motel owners, and yet we aren't ask to pay the Hotel for cleaning it up afterwards We've paid them already to be a slob. It comes with the price of the room, unless we did damages.

I have rented to doctors, ministers, Police Officers, and let me tell you, they are slobs. I rented to a Section 8 tenant that was like a dream come true. She was the cleanest tenant I ever had, and even planted beautiful flowers in the front of the house (Most Section 8 tenants aren't like that, but she was). But I expect people to be slobs when they leave. And what a gift when I walk into a home and find it clean!

When a tenant leaves they are anxious to move into their new home, not clean the old one. And they usually wait until the last minute if they do intend to clean.

When we are landlords we see how other people live, verses other people who see each other only as a friend, or a co-worker or an occasional acquaintance. We, however see it all. Their Hyde side and their Jekyll side. Their faults and their good points. Their neatness, and their snobbishness’.

So just remember that the rent money the tenant pays you allows them to live like a slob in your home. That's their right! As long as they don't do damages, cause health hazards, or do anything illegal, they pay you for the right to live ....TO LIVE...in the home. To feel comfortable in the home. And if living like a slob is how they live, then so be it.

When I rented to my tenants I always referred to the rental unit as their home. After the signing of the lease I gave them a card with the keys, welcoming them to their NEW HOME.

When I left the home and got back into the car to drive away, I would say to my husband, well, that's the last time we will see this house look this way again, and he would say, Yep, and we drove away, all the way to the bank, happy that we made a lot of money that day and another house no longer vacant.

Nancy Neville

Security Deposit Trust Fund Accounts

There is a lot of debate about whether or not a Security Deposit should be put into a separate bank account.

Some States require you to deposit a Security Deposit into a Trust Fund Account, which of course would be separate from your personal and business bank accounts.

Some States require it to be put into an interest-bearing Security Deposit Trust Fund Account.

But let’s just say that your State doesn’t care, and allows you to co-mingle it with your business bank account. Is that okay? Is it a good idea?

Lately, I have seen a lot of investors creating an LLC for just one property of theirs. Most LLC's cover at least 3 to 5 properties per LLC. But, once again I am seeing an LLC per property by more and more upcoming investor's

The reason being, if that investor (landlord) is sued by a tenant, a neighbor, or whomever, and they win, they wouldn't be able to take everything this Investor Owns, because they are only suing one company, one LLC and not all of the LLC's this landlord/investor owns.

(An LLC protects the owner from having all of his assets attached to a lawsuit, but limits it to only the LLC the plaintiff is suing )

So, let's say this LLC has been sued, and the person suing took him for everything he was worth, in this LLC.

And let’s say this investor, was able to co-mingle the tenant’s Security Deposit with their own business bank account.

Or let's say they did have a separate Security Deposit Bank Account but didn't call it a Security Deposit Trust Fund Account. What do you think would happen to that Security Deposit in that LLC that is being sued? It would be confiscated!

Once an LLC has been sued, and I'm using a scenario where the plaintiff suing won big time, they would devour that LLC, put it out of business, etc. But, If the Security Deposit was put into a Security Deposit Trust Fund Account (which would be in a separate bank account of its own), the plaintiff couldn’t touch it. A Trust Fund account cannot be attached to the lawsuit.

Now, I’m not an attorney, giving legal advice. I am only repeating what I've learned and experienced firsthand. The reason we have LLC's is to protect our other properties from a lawsuit. From preventing someone taking everything we own. The same thing is true when you make a Security Deposit a Security Deposit Trust Fund Account. It can't be touched. It protects the tenant's money.

Here is an excerpt from an article online regarding Security Deposits:

“Establish trust accounts for security deposits. Make sure your bank knows the deposit account is for “trust” or “escrow” funds. This will prevent forfeiture of those funds in the unlikely event that you or your company encounter legal issues.

?Keep security deposits in a separate trust account that is under your control, even if state regulations allow you to mix it with rents or turn it over to the rental owner.

Never mix accounts because it’s far too easy to accidentally spend the security deposit funds.

So, if you are sued, and you have your Security Deposit setup as a Security Deposit Trust Fund Account, at least you have the Security Deposit left to pay the tenant(s) back if you lose the business.

Nancy Neville

Your Profit and Loss Report is your Resume!

I know that when we are new to this business, we are hesitant to spend more money than we think is necessary, after all, we have spent a ton of money on the rental home and getting it ready to rent out, so to think of anything else like a financial software program, is just not on the list of things to do, at least for now. We only have a house or two, we say.

And just because we got away with not having a professional layout when we received a mortgage for our first rental or even second rental, we think it's okay just to present a mortgage company, bank or hard money lender, just some figures written down on a piece of paper or on an Excel Spread Sheet.

But what happens when the time comes when you want to really expand? A money lender is going to want more than just an excel spreadsheet, sometimes even after your first house is purchased and you are on your second. They want to see that you are truly a professional. A real business that has a lot on the ball. Especially if you plan to expand. They want to see that you have grown as well by how well you run your company.

QuickBooks and CPA's are usually very best friends with each other and that says a lot to your money lender. It tells them that you are serious about your business and are interested in keeping track of every penny you spend, by keeping expert reporting on every aspect of your investment properties. And you have chosen a software program that is popular with CPA's.

If you are an employer and an applicant applies for a position with you and hands you their resume done via an Excel spreadsheet, versus someone who hands you a professional resume done through Microsoft Word or some Resume software program, which one would you think would be the best suited for the job, based on both applicants having the same qualifications? Looks do matter, especially to business people. Especially to someone you want to borrow money from.

QuickBooks is an expense account. Right off the bat, you are able to list QuickBooks as an Office Expense. So there is no excuse for saying I can't afford it right now. If you can afford a house, you can afford QuickBooks, (or any financial software program that is professionally suited for businesses) a computer, a printer, and the equipment you need to run your company. It is a must, that you also include this as an investment.

Many mistakes new investors make is to skimp on their office equipment. It is just as important as the rental home you purchased.

This Industry has to do with legal issues, and many lawsuits, and if you don't have the best to protect your investment, then you won't be in this business very long.

I know, it seems silly to think that by investing in a financial software program verse Excel will make any difference at all, but it truly does to the person you want to borrow money from. It could make a difference between you getting that home or that other investor who also applied.

Nancy Neville

A little advice for Newbies:

THE TENANT PHASE

THE FIRST MONTH (THE HAPPY PHASE)

During the first month of a rental period, the tenant is happy. They wanted the home, they got the home and everything is fine. THEY ARE VERY HAPPY! You spent a lot of time at the signing of the lease telling them what you expect from them and what they can expect from you. They seemed to be happy and they nodded in understanding.

THE SECOND MONTH

Somehow during the second month, when the newness wears off and the happiness falls into a routine, the new Tenants become confused. They seem to forget what the rules are and when rent is due (even though they have a written lease agreement to refer to). If they are one of the few tenants who does not get confused during this time, this means they have jumped from the Second Month phase into the TESTING PHASE which may cause a few problems, but I will talk about that in a few minutes.

To help the Tenants not be confused during the 2ND MONTH PHASE, I always bill my Tenants their rent 10 days before it is due. It's during the 2ND MONTH PHASE that I will answer any questions they may have and not make them put it in writing.

TESTING PHASE (May begin as early as the 2nd month):

The TESTING PHASE is a very crucial phase. Whether the tenants and you get along is determined during the TESTING PHASE. More Tenants than not like to Test the Landlord. If they had gotten away with it with their previous landlord, chances are, they feel, they can get away with it with you.... so they will try. They will pay their rent when they want to, putting you last and live the way they want to regardless of your rules.

It is very important to nip this in the bud during the TESTING PHASE, because if you allow the tenant to get away with things such as paying their rent when they want to and doing what they want, then chances are you will never proceed past the TESTING PHASE.

THE THIRD MONTH:

If you make it to the third month, that is good. But it is also very crucial during this time as well to make sure the tenant stays on course. The Third Month strengthens your position as to who runs what. During this time you want to make sure that the tenant keeps paying their rent on time and keeps obeying the rules. One little falter on your part can throw the tenant back into the TESTING PHASE. It is very important that you guide them during this time as to what you expect and want. And important that you gain their trust and respect during this time.

THE FOURTH MONTH - THE COMFORT PHASE:

The Fourth Month through the first year is THE COMFORT PHASE: the tenant becomes accustomed to your rules and is starting to feel comfortable. If you have handled everything correctly, being strong when needed to be, and doing evictions when needed, the Tenant will feel secure because the Tenant will know what is expected of them and will feel comfortable and will want to stay. (Tenants usually feel comfortable with stability and sameness).

AFTER THE FIRST YEAR:

After the first year, the COMFORT PHASE becomes more stable and each year thereafter. It's just a matter of keeping your Tenant happy, yet, making sure they don't slip into the Testing Phase from time to time. Even old time Tenants will want to go to the Testing Phase if they see their Landlord falter, get too over-generous or too understanding.

When that happens the Tenant's stability changes because the rules are changing throwing the tenant into the Testing Phase again, so we don't ever want to falter but always stay strong and in control.

THE MOVING PHASE:

During the moving phase the Tenant, no matter how many years they have been with you, seems to forget everything again. They become babies and they revert back to the TESTING PHASE. Once again they never refer to the Lease and must depend on you for answers.

During the MOVING PHASE, the Tenant can change personalities quickly. It's like they drank a potion that changed them from Jekyll into Hyde. They become this fiend, this villain that could destroy you and is probably the hardest phase of all the phases.

It is during the MOVING PHASE, that you must be cool, have all your wits about you and be prepared, yet still be cordial so as not to enrage the monster that seems to be lurking in your Tenant during the MOVING PHASE (as there is NO ANTIDOTE to calm the savage beast once it takes form). If by chance this happens, it is best to not confront the beast but to keep your distance until the courts can set it free!

With time everything will fall into place as long as you treat Landlording as a business!

Rent On!

Nancy Neville