All Forum Posts by: Brandon Harris

The general advice is to hold properties in LLC's and have operations in an S-Corp if your ordinary business income is above $40k. Again, that is general advice and you should consult with an accountant or lawyer to discuss you specific situation. Check out Mark Kohler. He talks about the "trifecta" for protecting assets and providing general tax benefits.

@Jonathan R McLaughlin Thanks for the feedback. I am going to charge for the smoke detector and my labor, so around $50. I'm just not going to charge the $500 tampering fee on top of that. They'll have some repercussions, but not the full blow. I can always change my mind depending on their response to the lease violations.

Oregon is a very tenant friendly state and we have a 3 strike rule. With smoking and unauthorized pets, I can charge is $250 per occurrence AFTER the first warning. If I were to evict it would be because of the unauthorized residents. I couldn't evict because of the smoking or cat until they fail to meet specific deadlines or certain number of occurrences. There are a lot of different rules in place with different requirements...I'm no lawyer, but I'm guessing the full cleaning/fumigation clause wouldn't fly here.

Same thing goes with the garbage and pet feces. First strike is no fee. 2nd strike is a $50 fee. 3rd strike is a $50 fee + 5% of rent. All 3 strikes have to occur in a 12-month period. I am giving them a week to remove both. Then they get a 2nd warning. At that point I'll definitely consider paying someone else to do it and then charging the tenant. Good idea.

If they want the unauthorized people to stay, I am increasing the deposit $1,250 and charging an additional $500 pet deposit. I hesitate to increase rent mid-lease because of our rental laws. If I do renew their lease once the year is done, they will see a rent increase.

Quote from @Bruce Woodruff:

Quote from @Brandon Harris:

Don't do this. If smoking is against your lease rules, then stick by them. Your next tenant might have allergies. Smoke of any sort is incredibly hard to completely remove. You need to tell them that if you ever find that they have smoked anything inside, they are going to be immediately evicted.

You're being a push-over here. Not a good character trait for a landlord. Maybe hire a PM, or sell and out your money into stocks?

You are right, I will be stricter about the weed smoking. 

@Nathan Brown That is my plan. I don't plan to look the other way, but I'm also not planning on letting them get away with breaking the lease. Everything has to be in order for them to continue living there. I'm also going to likely increase the deposit and charge a pet deposit now to add to my protection.

By "taking it personal" I mean that I don't see it as an insult or wound to my pride. Giving them the "benefit of the doubt" is just assuming that they aren't being malicious. They made bad choices, but I don't think they trying to hurt me. The tenant barely knows me except for a couple interactions when the lease began. So I won't bring emotion into it in determining on what my actions are. It's a business relationship. If they break the contract, then they need to remedy or our business dealings are done.

@Jon A. I agree. I plan to issue a cure or quit notice immediately. If we don't resolve the issues immediately then we will move forward with a notice to vacate.

@Courtney Nguyen Thanks for the input Courtney. Thankfully it wasn't cigarettes. That would be a big no-go. I'll call my usual cleaning company and see what the typical cost is for weed mitigation. 

Quote from @Theresa Harris:

Quote from @Bruce Woodruff:

@Theresa Harris I am curious....you are one of the voices of reason on here, and yet you don't seem to mind that they rented (sub-let) to other people without asking the landlord? Not just one, but two people....and with pets? That would be a deal-breaker for me, am I over-reacting?

It would annoy me as well, but if they are already living there it may be easier to run the background checks and screen them then having to deal with a potential eviction.  Not sure why, but the smoke detectors being taken down is more of a concern to me.  When it comes time to renew their lease, I wouldn't do a renewal though given all of the stuff that has happened.

I agree, the smoke detectors are my big concern. Both of the roommates had very clean rooms and their bathroom was very clean. Other than not telling me they are living there they are good tenants. As long as their background checks come back fine then I don't mind adding them to the lease.

Thanks for the notes on placement. Upstairs they are in every bedroom and the hallway. Downstairs is an open concept kitchen/dining/living room so I don't have as much leeway with where to put them. C/O detectors were still up and in the correct spots.

I'm going to do another inspection in 2 weeks to make sure everything is fixed and the smoke detectors are still up. Then I'll do another one in 3 months before I have to give notice of rent increase or non-renewal (in Oregon the notice period for rent increase is 90 days). I think I'll make the decision on renewal at that point. If they are following all of the rules then I might consider renewal. I will likely increase the deposit and rent. 

For smoking weed, I know they won't go outside to do it. They'll just keep doing it inside. I'll remind them of the rule, but I'll likely charge a smoke cleaning fee at move out.

@Bruce Woodruff

I am probably being too nice, I'm not taking it personally though. I'm giving them the benefit of the doubt because they seem inexperienced and are just starting out in their careers. I want to avoid the hassle of evicting, but also put contingencies into place to protect myself. If the house wasn't so clean and the rent didn't come in on time every month then I would definitely see this in a different light. You are right though, if they don't follow the rules now, they might not later. I'm thinking that increasing deposits might be a good remedy to protect me and incentivize them to follow the rules.

Hello,

I'm looking for some input on how to resolve issues I found during a rental inspection yesterday.

I performed an inspection of a house that has been rented for 6 months. Lease is 1 year term. The tenants are a woman, her 2 year old daughter, and her husband who travels for months at a time. They have 3 dogs and I charge a $25 pet rent for each dog, no pet deposit. General deposit is equal to rent. The house is in a B neighborhood.

The tenants have paid on-time, or even early, every month so far. During the inspection the house was clean on the inside and there was no damage. It looks like they are taking care of it well. 

Here are the issues and my proposed solutions I encountered:

-The tenant was not there for the scheduled inspection. She forgot about it. Instead, I met her 2 roommates who I did not know about and who are not on the lease. I am going to have them do background checks and add them to the lease if they want to continue living there. I don't mind more people living there, but they have to be on the lease. I also don't appreciate being lied to about who is going to live there.

-The backyard was full of dog poop. It was hard for me to walk through it because it seemed like there was more poop than ground. The backyard is all bark dust so there is no damage to landscaping. I am going to ask the tenant to pick it up within 2 weeks and keep it picked up.

-There were 2 smoke detectors removed. I replaced the 1 that I could find in the house and went to Home Depot and bought a replacement for the other. I am going to charge the tenant for the replacement. Per the lease I can charge them $250 for each smoke detector that is removed. I am not going to do that, but I am going to remind them of it and tell them I will charge them if it happens again.

-One of the new roommates has a cat. I am going to add the cat to the pet addendum and charge them an extra $25 of pet rent per month.

-There is a Christmas tree leaning up against the backside of the house. It is completely dried out. I am asking the tenant to dispose of it immediately since it is a fire hazard.

-There is some excess garbage near their garbage cans. I am asking them to clean it up.

-The tenant and one of the roommates had several pipes and bongs in their rooms. It smelled a little of weed. This is legal in my state, but my lease says that smoking is prohibited on the property and the tenant said she was fine with that. They aren't going to stop smoking weed so how should I approach this?

I am going to schedule a follow up inspection in 2 weeks to check on the problems and make sure the smoke detectors are still in place.

I'd love feedback about my solutions and any help you can provide with the weed smoking issue. If they resolve these issues then they are good tenants who pay rent on time and keep the house clean and undamaged. One of the roommates was very nice and cooperative. The other seemed nervous I was there, understandably.

Thanks in advance for your input!

To me that rate is too high. It guarantees that I will lose 1 month of rent each year in order to protect myself from potentially losing rent. You would have to lower it a lot to be worth it. I suppose it depends on your area though and how long evictions take.