All Forum Posts by: Account Closed

The problem with having a little bit of compassion in business such as ours can lead to serious issues down the road. 

Our properties cost thousands and thousands of dollars.  We have invested a ton of money, time, sweat, worry, and anxiety because we never know what the Real Estate Market may bring.  Therefore, the only thing that we can rely on, is our Lease Agreement and making sure we choose tenants that are COLLECTIBLE and ADULTS.

We have a Lease Agreement that states all the rules for our tenants to read and adhere to.  We screened them, we called references, we checked background, we checked their work and references.  We never rent to children, so we should never view tenants or treat tenants as children.  It is an insult.  

If you go over the Lease Agreement with them prior to handing over the keys, during the signing of the lease, you are making them aware of their responsibility.

Yes, there are some minor little things, you may turn the other cheek on.  But what happened here created a lot of damage.  

Do you know that when someone violates the law, most say to the Judge, Gee I didn't know it was against the law, but too bad so sad, they still are held accountable. 

If we go over every detail about what we expect from our tenants, as well as having it written in the Lease Agreement, prior to handing over the keys, there shouldn't be any excuse for not knowing the rules set forth in the rental agreement.

When tenants don't change the filters, it gets thick and ugly, causing clogs and it makes their bills go higher.  The furnace works harder, the air condition works harder, and they end up paying more money then they should, and it can ruin a furnace big time.  (I go over this with them as well)

You see, we need to train our tenants to be future homeowners by letting them see the necessity for changing the filter, and all that goes with what can happen to a house if not take care of. This isn't treating them as children, it is teaching them what to expect when one lives in a house.  

Plus, if they couldn't take care of changing the filters themselves, we are only a phone call away.  We may charge them a fee to do it ourselves, but if they can't do a simple thing like change a filter in the furnace room, then they are not responsible people. 

How long does it take to write on Calendar the date of when the last filter has been changed and the date the next filter needs installed?

Once again, we rent to ADULTS, NOT CHILDREN.  

Compassion is being a good listen, being understanding towards another person's life and woes, but it doesn't come into play when it comes to their responsibility in taking care of a rental home.  

Nancy Neville  

Good topic:

Everything sounds good, but I would send her a copy of the page in the Lease Agreement where it states what you are Quoting along with the bill. 

In QuickBooks you want to make it a REIMBURSABLE BILLING.

When your HVAC contractor sent you an invoice you should have entered in that Invoice in the Vendor Center as "Enter Bill".   On the stub of the bill they sent you, in the Customer Column, you would choose the tenants name.  this enables QuickBooks to bill the tenant for this charge.  Then when you are ready to pay your Contractor click on Pay Bill. 

When you to go to the Tenants Customers Center and click on Create Invoice, QuickBooks will have an Invoice already waiting for you made out to this tenant.  You will print out this Invoice and send it with the letter to the tenant, along with the copy of the page of the Lease.

When you bill your tenants for a repair or a charge that you had to pay for first, and it is something that is owed to you by the tenant,  you need to do it through the Vendor Center, Customer Column, in order for it to be a REIMBURSABLE BILL.

If you don't do it this way and only charge it as an EXPENSE ACCOUNT, and then the Tenant pays it, the tenant's payment will show up as income account, raising the amount of your income at the end of the year into a higher tax bracket.

By making it a REIMBURSABLE BILLING, it makes the transaction a wash.   You paid it first, they paid you back.  It's like a loan, in a way.  It is neither Income nor an Expense.  If the tenant never pays this bill, then it becomes an expense account.  Something you had to pay that was caused by the tenant, but you never receive compensation for it. 

You don't want QuickBooks to think you made more money then you really did, because then at the end of the year you may end up paying higher taxes. 

If she doesn't pay it, you should have it stated in your Lease Agreement, that any money you receive in your office from your tenants will be applied first to any outstanding bills that they owe.  Therefore, if they pay rent for next month and they do not send in a payment for this bill, then you can apply that rent money to the outstanding bill.  If it's in the contract, it is allowed, unless there is a law in your state that says you cannot apply rent money to any outstanding bills.  However, I've not seen that yet. 

I hope this helps.    

Nancy Neville

Irv, I understand and your apology is accepted.  I am an "Old Gal" and sometimes we just blurt out the first thing that comes into our heads when we get older. 0

Actually, I am a bad salesperson.  I hate selling.  And I hate promoting my stuff.  But if I don't do it, then I can't help others.  And there are new people coming on here daily and so I advertise for their sake, but I'm sure I make other people on here sick to see another "Ad" from me.  And often thought they feel the same way as you did.  Thinking how "Shamelessly" I'm advertising my stuff.

You turned out to be a gentleman and I wish you much success.

Nancy Neville

Irv, I don't "Shamelessly" promote my books on here, I pay to advertise on here and that is quite a different matter.

When someone promotes their business on here it is done through the MARKETPLACE. 

Just to let you know. 

Nancy Neville

QuickBooks Pro takes care of flips pretty well. 

Not only that, but it has a feature called a Fixed Asset Items List which you can CUSTOMIZE to tell you anything you want to know about this property.

You can design it to give you the Land Description, the year it was built, Square Feet.  When it was built.  You create the form, name the form, and QuickBooks will do it for you.  It just doesn't get any better than that. 

Nancy Neville

What would you like to know, perhaps I could help you out.

The Tenant Phase by Nancy Neville

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 do 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 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 at 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. It is 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 enraged 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 Land lording as a business!

When I took over several properties from a previous landlord I knew I had my work cut out for me.  Almost all tenants were behind on their rent, and property taxes were 3 years behind.  

I terminated each tenant that was bad,  one at a time.  Fixed up the unit after they moved out.  Doubled the rent and within the year I was making a good size profit.   

I developed a great lease agreement, made everyone stick to it, and made this business work like clockwork.  

It's tough to take over somebody's mess, but if you buy cheap and see a potential and know your own mental and financial worth, you can do it.  

The bottom line is that we need to train our tenants to pay rent when it is due and not pay rent anytime they feel like it in a rental month.  That is the first mistake new landlords make.

File that Notice to Quit on the very first day rent is late.  

You see tenants are used to having landlords not adhere to the rental agreement if they have one at all.  By the time we get them, those of us who have everything in place that should be in place, need to train these tenants to understand that a Lease Agreement is an actual legal contract and has an actual DUE DATE !!!.

I think you'll do fine.  Recoup and as said above, you're now able to choose your own tenants.  The first thing you need to do is to make sure they are COLLECTIBLE.  Second, get as many co-signers you can if they are questionable.  That's half the battle.

Nancy Neville

List your properties as a class.  (Make sure you turn on the Class Feature in the Preference Section of QuickBooks).

When you set up your properties as a class, and you invoice your Guests for the rental term, you will choose that vacation rental from the class feature of the Invoice.

If you have repairs or expenses for each vacation rental, you will write a check and choose the correct vacation rental from the class column on the check. 

You will be able to see income per property,  less expenses per property,  by running a Profit and Loss Report by class.

It just doesn't get any better than that.

Nancy Neville

During my research many years ago on Property Manager's company set up,  I wrote the following:

In order to set up your company in QuickBooks correctly, you will need to do the following:

START FRESH (this means starting over right from the very beginning)

Set up a company for your Property Management Company (THIS IS CRUCIAL) with a bank account just for you.

Setup a Property Management Trust Fund Bank Account to hold your owner's money. (It must have your Property Management Name on the account, and it must be called a Trust Fund)

Set up a Security Deposit Trust Fund  Bank Account to hold the tenant's Security Deposits. (Some states request the Security Deposits be in an interest bearing account.)

In other words, you will need to set up two (2) separate companies, one regular bank account for yourself, and two trust fund bank accounts to operate professionally.

The reason you must have a Trust Account for your Owners and one for the Tenants Security Deposits (and they must be labeled as I’ve stated above), is to protect your clients from bankruptcies and seizures of their property. If you don’t have the words “Trust” as a title on an account, then these funds could be seized.

These trust funds must also be attached to a property and/or person to distinguish them from each other. 

When I worked for a Property Management Company after I retired as a Landlord, they used QuickBooks and they had a lot of Landlords whose homes they managed and all clients had their own company file.  I was pleased to see that they had a company file for each landlord/owner.  

It's the only way really to do business. You are protecting your clients and their funds.  You are protecting yourself against lawsuits and problems during audits.  

It really doesn't entail that much work to enter data into a computer whether in one company file or several. It's all part of the job. 

Nancy Neville