Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here
Pick markets, find deals, analyze and manage properties. Try BiggerPockets PRO.
x
All Forum Categories
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

All Forum Posts by: Steve Tom

Steve Tom has started 10 posts and replied 29 times.

Post: Tennant Suing for Deposit (TX)

Steve TomPosted
  • Round Rock, TX
  • Posts 29
  • Votes 6

I am kind of in a similar situation with a tenant who left in around outter Austin area. I posted in https://www.biggerpockets.com/forums/52/topics/1150467-pet-d...

I have simialr questions on responsibilities too.

The difference is that its a $200 pet deposit which we are using to cover the reapir of the property, since the security deposit was used to cover the penalty for the tenant breaking the lease early. (I know it was a bad move on my part, but I was trying to make it easy for the tenant... before really had the time to check on the condition of the house after they left.)

It is still three days before the 30 days period. 

So far beside the pacthing, painting and cleaning, tenant only agreed to pay for the broken fridge shelves and the door weather stripping that was torned by his pet, with the pet deposit. Thats total of less than $60.

I had to pay for new paints and brushes. The Roman Shade he broke and then attempted to fix made it became unusable, so I had to buy a new one. Lastly, the dirty air filter had caused AC to leak because the air flow stopped and coil froze. Also the HVAC drain line was blocked (The HVAC tech said the drain line was clogged because the tenant didn't regularly pour vinegar solution down), water couldn't drain and leaked out of the AC unit.

Can i use the pet deposit on the above? Or I am out of luck?

Post: Pet deposit to cover damages

Steve TomPosted
  • Round Rock, TX
  • Posts 29
  • Votes 6

Good ideas Sarah!

I have been using the same HVAC tech for years and knew him well. Maybe I can setup something so he can go check and replace the filter. Of course, that woudl cost more $$.

however, the walkthrough clause would work better. Might be what I need to put into my next lease agreement. Thank you for the ideas!

Post: Pet deposit to cover damages

Steve TomPosted
  • Round Rock, TX
  • Posts 29
  • Votes 6

So since my previous post, the tenants have moved out.

At the end, I guess I was being careless during the last day they were at the rental. Instead of focus on the walk through, he spent much time asking me questions and we just.. talked. Because it was the last day of the lease, he still had not finished fixing/touching up the house - wall, trim.. etc. He told me he had the paint and a brush, but there wasn't time to do it as it was the last day. Ok, fine. I told him i will do the touch up.

Bad move.

My wife was there and she noticed that after they had hired cleaners, the house was still not clean. There were cobwebs and dust on many surface, but they had the invoice from the cleaning company. So I asked and he told me his wife will clean up. They broke one of the Roman Shade, but supposedly had someone fixed it. We trusted them and didn't checked.

Since I worked at night, and it was already 3pm, we chatted some more. And i told him since there was only the $200 of pet deposit left, I will take money off it. We agreed that the new paint for the trim could be $20, for now, and I might deduct more if I needed.

We left and returned two days later. There were still dust and cobwebs; the Roman shade they had fixed was left on the kitchen island. Wife put it up but it wasn't functional.. it was because they just glued the back of the shade with one big sheet of fabric. Therefore, the cord and loop won't work. Basically it became useless and we had to replace it.

As we slowly walked through the house, there were a lot of spots and placed that need patch and paint over, not just touch up. So we had to buy two more different color of paints and more brushes, painters tapes.. etc.

All added up to $160.

Thats all right? Nope. We opened the fridge and discovered two of the shelves were cracked. Replacements costed $38.

We spent the next two days cleaning and patching up the house.. Initially i was going to hire a cleaner, but looking back I am glad I didn't.

On the fourth day, we realized we need to check the AC unit because we are in Texas.

We turned on the AC and let it run. After a few hours it wasn't cooling much, so I went into the garage and check the unit... holy moly, there was water leaking out of the HVAC unit. I turned it off and try to pull the filter out. The filter was literally disintegrating in my hands because it got so wet. Afterward I got a good look, the filter was so clogged and dirty, the air was not moving through it. (Also I think they have never pour vinegar into the drain pipe to clean it at all, so the pipe was clogged as well. As the result, coil froze and the pipe couldn't drain and water leaked.)

Costed me $50 to rent a dehumidifier, all day to clean and mop, and then $50 for HVAC tech to check the system.

I called and told him what happened, he insisted he had changed the filter regualrly and did so just two months ago. And that he is an honorable person and wouldn't leave the house in bad shape, and that he wasn't responsible for the broke old Roman Shade, or al of the stuffs we had to patched and painted because we did the walk through already.

I spent $300+, not including cleaning supplies, on the house after the tenants moved out.

Since we did the walk through before all these, I am not sure if I can even take more money out of the $200 pet deposit.

Lesson learned.

Quote from @Nathan Gesner:

I think you need to work on a better policy.

My policy is that the departing tenant must:

1. Give notice at least 30 days prior to departure, or at least remain responsible for rent for a full 30 days;

2. Pay an early termination fee equal to one month of rent on they day they give notice;

3. Work with me to market and show the rental to prospective renters.

This enables them to make a clean break, even if I haven't found a replacement tenant. It gives me 60 days (30 days with departing tenant still in plus 30 days termination fee) to find a new tenant before I start to lose money. I typically find a new tenant to start right after the old tenant departs, resulting in more money in my pocket.

You also shouldn't allow new renters to lock in your property so far in advance. What happens if October 25th comes along and they tell you they changed their mind? I hold properties for no more than 15 days, and I only do that with a deposit in hand. If the renter changes their mind, I keep the deposit.

If your departing tenant pays an early termination fee, that's you agreement that you are releasing them. If they don't pay a fee, then they should remain on the hook for the terms of the lease until a new tenant is placed. However, it's unfair for you to accept a tenant two months from now and force your departing tenants to pay rent for two additional months.

Probably misunderstood. I did not asked the outing tenants to pay two months of lease. It is just one month of the lease, as stated in the contract. It was just that they are trying to not to pay it.

Thx Julie, Charles.

I copied the term off the lease based on recommendation from the realtor who has helped leased out my property before I started doing it myself.

It does states that the new tenants must take over the lease so the 'current' lease of the property would be continuous without a break. I guess absed on that since the lease term does breaks, as there is a month of gap, then the current tenants will have to pay the penalty.

I will be sure to change that in the future.

Hello everyone.

I have a question which need some helps. 

My current tenants are termianting the lease early. They have renewed an one year term little over three months ago, but have bought a house in late August.

In the contract, it was stated that if the lease is terminated early, tenants must either assist in finding a replacement tenant to take over the lease, or will be charged in an amount equals to one month of lease as penalty.

It has been almost a month since they have submitted their intention to terminate the lease, but we still could not find a tenant to take over the lease. I have listed the property on Zillow, and they have helped by posting on NextDoor and asking their coworkers.

Now, there is one possible prospect tenant who can take over the lease, but he won't be moving in until end of November. Therefore, he won't be paying the rent for October, and most of November.

The argument between me and the current tenants is that if I have agreed to sign on that new tenent, since he won't be able ot move in right away, this doesn't count as continuation of the lease. This is because the house will sits empty for over a month, and I won't be able to collecting any rental income. They argued that since that new tenant signs the lease, it doesn't matters when he moves in as the lease, in theory, would continues.

Who is right on this? 

Post: Title transfer and gift tax

Steve TomPosted
  • Round Rock, TX
  • Posts 29
  • Votes 6

Long story short, my in-laws have helped me paid off our first property 8 years old, so we could saved enough money to purchas our current house and turn the old house into rental property.

Now that my in-laws are in their 80s, they would like to have a place of their own to retire to. Currently they are living with my sister-in-law in California but not in a very good term with her. 

Here are a few questions I have.. 

1. Can I just give them the old house by transfer the title to them?  (Since they helped with almost 60% of the finance of the house by emptying their saving)

2. They are not wealthy now, sicne both are retired and only source of income are from SS. If I transfer the title to them, will that affect their SS benefit? Also they have to report to the California State government?

3. Do they have to pay gift tax? 

4. In order to help them, we plan to help pay for the annual property tax. Woudl there be any tax consequences for us and them - If they are owners after the transfer and we helped pay the taxt?

5. Another route my wife is thinking, is to transfer the title to her sister, and have her manage it all. Woudl thsi be easier than giving to the parents?

Thank you. However, the more I think about this, the more questions I have and definitly need advices.

Nothing. I asked for more information and now.. crickets. I will just talk to him.

Post: Avoiding Bad Tenants

Steve TomPosted
  • Round Rock, TX
  • Posts 29
  • Votes 6

@Howard Spector I use Zillow and Avail. I added Avail because it also has connection to apartments.com. 

The size of the shed will be determined by what you, or the potential tenants, will be used for. 

Like what @Colleen F. stated above, that Suncast shed is great for small items like yard tools. But if you will be sharing with the tenants, or the tenants have other bigger items, you will need to look at bigger shed like Toughshed, or Monarch Do-it Yourself 10 ft. x 8 ft. Outdoor Wood Storage Shed (80 sqft.).

Also how big is the yard? A big shed might take up too much space.