All Forum Posts by: Pixel Rogue

Quote from @Kevin Sobilo:

@Pixel Rogue,

1. How do you believe they damaged this door seal? You're description indicates they DID NOT damage it as you describe the damage as "cracking" which is how door seals fail from normal use. You are basing your claim of damage solely on the time the seals lasted not on the type or cause of the damage. The tenant will legitimately claim the seals were of poor quality to begin with. So, I would not claim that as damage at all.

The chipped handles is tenant caused, BUT did they use the door in a way other than its normal use to cause the damage? If the damage is minor, again I think the tenant can simply claim the quality of the appliance was poor and they have the door-seal quality issue to further back up this claim. So, again unless its clear they MISUSED the handle I would NOT claim this as damage.

2. Yes, window treatments are a common one for tenants to break. If you quoted a price in the lease, that is your price because you both agreed to that.

The money is to cover the damages, what you do with that money is up to you.

I personally use the cheapest horizontal mini-blinds from WalMart. They look and operate fine and the cost to replace is minimal. That means, when they are damaged it doesn't eat up the whole security deposit leaving more money to cover other damages better protecting me.

3. I am having trouble imagining the damage to molded window handles. I don't think I would charge anyone for a chipped handle or two for a couple reasons. First is that its difficult to quantify the amount to charge like you indicated. Also, do you have pictures showing EACH AND EVERY window handle prior to move-in? You need to be able to substantiate this tenant caused this damage and that it didn't exist prior and small items like this are less likely to be prove-able.

4. I personally don't charge for small holes and touch-ups unless they are grossly excessive, but I would charge for removing the tape/adhesive. However since you have a charge in your lease and they knew about it they could have taken those steps themselves prior to moving out.

So, as long as the charge is reasonable I would charge it. However if you try to charge $20 for each piece of tape or something else egregious I would expect a magistrate to consider that usurious and not allow it. Keep in mind magistrates deal with MANY MANY cases involving small issues so their rulings OFTEN may not follow the correct technical application of the law. They will substitute in their own sense of fairness knowing people are unlikely to appeal such a small issue. Also, magistrates don't even have to be lawyers to get the job! They can simply take a class. So, they aren't experts on the law like people might think.

I would always try to negotiate with a tenant. I don't think anything anyone offers is "evidence" in court because you would be backing up your claims with documentation such as the lease, or quotes for work or material prices.

Make sure you get your letter out to the tenant about the damage deductions from the deposit though. Not doing that can make you liable to them for 3x the deposit in return! 

Tenant was rather rough on things in general. Fridge door seal I can replace. Renting a unit with obvious damage (door grip, dents and scrapes to front doors has been (ime) challenging. Poor first impression of landlord, kills me to replace a perfectly working (newer) fridge over cosmetics. 

Yes, happen to have before and after photos of each window 

Hello everyone,

Have a long-term tenant who recently exited. We have been fortunate to rarely hold any security funds from former tenants. In this situation we have a former-tenant  hyper sensitive to return of full security deposit (when unit wasn’t returned in good condition) and we are  experiencing a few unique damages. Hoping others experienced similar with input to share, lessons learned etc.

1) REFRIGERATOR: Brand new refrigerator was installed after tenant  maybe two-three years ago. Fridge door seal is cracked in several areas needing replacement. I have fridges for decades and the seals don’t go, yet expect the argument or normal wear. Better still, the recessed handle trim is visibly chipped (stands out as bad.) The seal can be purchased but the recessed trim is only available by purchasing the entire door. Entire door is apx. $550. Fridge door also took a few smaller dents. Doesn’t seem fair to charge the full price to replace the door but what other options exist? I would also sooner apply that amount towards a new fridge than buy the door.

2) WINDOW TREATMENTS - Each window had window blinds. Front had verticals and more traditional horizontal blinds throughout. Upon exit the verticals vanished, one replaced by a horizontal. Few left were broken, never cleaned. Lease has stipulations for condition of blinds.  

A) Lease was older where price quoted in lease doesn’t cover cost of replacement. <- presume that is on me. 

B) Would prefer to install curtain rods now over blinds for most windows. Can I purchase the rods and charge back to tenant as missing/damaged window treatments when originals were blinds?

3) Windows - a fair amount of windows took damage. Clear damage would be the vinyl window handles chipped and broken. There isn’t much of a way to replace the molded handles by themselves. Windows are expensive to replace.

4) Glue Residues - Lease is very specific for no double-side tape or adhesive (ie 3M pull tabs ok, but not double sided tape.) Tons of double sided tape used which results in a fair amount of extra effort to restore (most cases paint comes right off the wall requiring patching sanding etc, some cases Good-off was effective. Lease has double sided tape specifically cited that includes a charge for each instance. Tenant clearly accepted these responsibilities. 

Here is  the biggest question -

I expect withholding  $1.00 of the security deposit is going to cause friction. Withholding the entire amount of the security deposit doesn’t even cover the costs incurred. 

If this goes to court, it is with a judge well known for being pro-tenant.

Fridge - I could purchase the new door and deduct. Seems a bit of a waste. Judge may also decide to prorate or chop that amount down, or throw it into the bucket of normal wear. Would it be safe to purchase a new fridge, deduct maybe 1/2 of cost to replace  current fridge door from the security deposit, provide receipt with explanation?

Windows - same question as above? Would I deduct the cost to replace each damaged window in its entirety, or provide receipt and take a smaller amount off as it isn’t as off the window glass was cracked or shattered? 

WINDOW TREATMENTS - same as above. If I switch from blinds to rods, would I a) provide receipts for the rods and deduct in full - receipt furnished to tenant,  2) deduct cost of blinds as priced today but receipt would be for curtain rods, 3) deduct cost of blinds as outlined in the lease but provide receipt for curtain rods (explanation and receipt furnished) 4)  be forced to replace using the same blinds that were installed when tenant arrived n order to deduct. 

DOUNLE SIDED TAPE - Lease clearly has amount spelled out for each occurrence. Is that safe to deduct when tenant signed? We do the work ourselves so there wouldn’t be a separate charge 

—-

Sorry this in ranking a bit. We had a walkthrough which I always offer for obvious damages (ie holes in the wall.). Window handles broken were called out during that walk through. Walkthroughs are never detailed enough to be final (ie often tenants have lower disconnected and discover broken appliances later.) Fridge

Was discovered after tenant raced away from walkthrough. Discovered shower head busted. Window treatments were so obviously missing, broken and such that it want called out during walk through.  Tenant took photos and videos but nothing detailed - a single shot or two of a room from the entrance, so is saying fridge was fine, normal wear etc 

Next - If we are being nice and deducting ‘portions’ of the charges and tenant continues to grind away, or this goes to court, do the compromise and smaller amounts offered negate the full amounts that could have been charged.  - like we ar nice, deduct portions instead of full amount..this goes to court and judge rules in our favor and that means the smaller amounts we offered being nice. If this goes to court we would expect the full costs deducted. 

Long winded set of related questions. Thanks for sticking though it and sharing input 

Quote from @Kevin Merck:

The guy was not wrong about the lower rate. He didn't say it the best way, but he meant that the income is not subject to self-employment tax.

Still remain strongly interested. 

Presume companies and bank accounts would be up and running….next steps:

• Each unit makes monthly payment to mngt company. 
• Establish solo Roth 401k
• Make quarterly estimated tax payments (?)
• Fund 401k

?

Thinking in these scenarios interest might be the way they are done, no? So one takes a loan, paying only interest (which is less than what one would be paying in taxes) - pay that off in full at end of period. Idea being that taking a loan, and paying off that loan, do not contribute to personal income. I'm expecting some on this forum to have gone this route...

Recently started catching a thread where one could take out a loan for living expenses, in essence covering cost of living yet having little-to-no reportable income...plus a bonus where interest paid is tax deductible. Interest on a mortgage (and yes, this would have been written when rates were lower) are lower than the tax bracket, even if we are talking capital gains.

Anyone here doing this? I'm interested in better understanding the play through back to payback. Some articles state this is a two year activity, paying back at the end of two years, new loan. Imagine if you get a great rate you'd want longer than 2 years. Many questions.

Quote from @Andrew Postell:

@Pixel Rogue I'm not sure that these things work the way you are describing them.  If you want tax advice, I would suggest posting this in the tax forum specifically.  This forum is more for financing.  

Thank you for the response Andrew. Sort of hard to untangle the two, creative investing in a tax efficient manner. Topic is clearly investing, in a way that would minimize future tax obligation.

529 + Secure 2.0 is investing, and then how to export that investment that meets govt. requirements.

Been reading up on the ITC< something I was not aware of prior.
• OZ - will look forward if it is renewed. 
• No children/grandchildren
• Bonds - have been reviewing but low returns (not helping w/inflation as mentioned)
• Goal is to the put away the landlord hat - tenants become a grind after a while (20+ years now)
• ^ that said one plan would be to purchase a duplex, rent out 1/2...me an realtor looking daily
• If CRE meaning a larger apt. like complex (live in one unit,) yes that too has been interest....and gobbled up by big investors in our area...even the smaller 10 unit buildings gobbled up...idea being live like a tenant and have mngt. company handle.

Clarification:
- 35k limit does not need to be all in the same year...6,500/year. 

Question:
- Some sources state the first 5 years of contributions are excluded from the 35k opportunity.
- Some sources state the 'last' 5 years of contributions...so wait 5 years before converting. 
So which would it be, first or last 5 years? Open and keep balance low for first 5 years, or open and let sit for 5 years at the end w/o contributions? 

Quote from @Henry Clark:

Consider rotating through your properties and doing the 2 out of 5 year tax free gains.  $500k max for married couple. Could do 2 homes in 5 years another 1 year in your next home.

If your rentals aren’t where you would live do your 1031 to a  better property then make it your primary for two years.   Talk with your tax accountant.

Look up my post what happens if you die.  Start setting up your financials so you don’t have to worry.  

Start looking at your savings in time or need buckets.  Fit to your risk reward.  Say you want two years of cash equivalents for live if expenses.  Always keep that balance in MM or CDs.  

After that 5 year window investments.

After that slightly aggressive.  Your wealth needs to keep working for you.  
Not financial advice. 

We have been mulling over moving into a property and sell it in two years, move to next. 
Now, let's say you earned 100, 200 on that tax free (yea!) - then what? Put that in mutuals or stock, forever paying taxes on the gains. Enough of that and it could bump you into a higher taxable bracket... what then? How can you invest and keep in the minimal tax brackets. Exaggerate for a moment of 1M, which even at a low 3% would generate 30k

Looking to build a future financial cushion that keeps us in the lowest taxable income brackets possible

Getting to the point where we may have additional funds to invest. Then there are investment properties which we may move into and sell, or shift through 1031 process.

We will use one investment property to purchase a home via 1031 and, after having it rented out a few years, move int and convert to primary residence. Considering 1031 into a syndicate situation as an option.

If the above plans work as anticipated monthly/quarterly/annual income would bump up brackets and tax obligations (ie. invest that in stocks, mutual funds and all gains get subject to various taxes.

Other than municipal bonds, what are other tax advantaged investment vehicles that are not simply 'deferring' tax in expectation of being in a lower tax bracket later, but will not increase taxable income now, or in the future?