All Forum Posts by: James Mc Ree

Thank you for your advice. It is what I expected that I can bill the tenants or evict the tenants, but can't get rid of the dogs only.

The dogs are not the trained dogs you expect for service animals. I used the wrong word in my post. They are "support" animals which seem to have the same disability benefit, but no training whatsoever. The tenants used an online service that gives a support animal certification within a few days. It is truly a scam. Some training or skills should be required of the animals to get this certification.

I have a tenant with 2 certified service animals (dogs). The dogs recently chewed my central air compressor resulting in a repair for which I told the tenant they were responsible. Then a second chewing. And now a third today. Each chewing generated a repair call. It seems these tenants may be incapable of supervising or training their dogs in the fenced backyard to prevent this from happening. The dogs are probably left out there and they do what dogs do: dig or chew. I haven't seen holes (yet). I am thinking of installing a chicken wire fence around the compressor, but I'd rather just tell them, "You broke it, you fix it!" or the dogs have to go.

Here's my question: Can I do anything to require the tenants to get rid of their destructive service animals without just evicting the tenants? I don't want to interrupt my cash flow and I don't want to keep dealing with the damage. I don't know if service animals are a protected class with regards to damage they cause. If they were just there by an animal addendum, I would end the addendum and order the dogs out.

Any ideas? I am already requiring the tenant cover repair costs and want to tell them the dogs have to go. The property is in PA.

How does your insurance company know you need to fix the roof?

Can you just replace the roof yourself, then apply for insurance with any different company and not mention the roof just like you wouldn't call out any other component of the property?

Did you include all of your marketing and management costs in your model, such as AirBnB/VRBO-type fees, cleaning, vehicle costs, maintenance, etc.? You mentioned you were going to do all of the PM yourself, but the property is three hours away one way.

If you are doing everything, that will be a lot of driving. This will impact your available time and cash flow. For example, 200 miles one way (guess) x $0.67 IRS mileage rate x 2 = $268 estimated vehicle cost per round trip, which is per guest stay.

You can probably find case law supporting both sides for the same topic if you were to go to court.

I would consider rooms with a few nail holes in the walls for pictures and such to be normal wear and tear unless your lease specifies otherwise. Many holes, large holes, etc might not be normal, but you would be arguing on the meaning of "many" and "large."

You may have the tenant on a technicality in that they didn't report the broken disposal and can't claim they didn't have time since they had time to pack their belongings and move out. A counter would be the disposal was broken regardless of whether or not they reported it. The key for me is, "Why is the disposal broken?" If it was normal use, then it is for me to repair. It's for the tenant to repair if it was abused.

I would try to come to an agreement with the tenant. If that doesn't work, you could charge them a reasonable fee for both issues and just let them sue you in small claims court if they think it is worth it. A quick conversation with an attorney is probably the best next step.

Always, always, always pay back your parents. It looks like they trusted you completely to do the right thing with the loan. You wouldn't have the property without them. Regardless of what you did in operating the property, paying them back is the starting point of doing the right thing.

I don't see how your parents are responsible for any capital gains tax in this. I couldn't stick a capital gain tax on my mortgage company.

Great advice above. Here are a couple items I can add:

- I try to schedule lease signing at their current residence, not the new property. New tenants always want to come to the new property. I want to see what their current residence looks like today because my property will look like that at the end of the lease. It's a last chance option to bail out if their residence is a pit of despair.

- Require renters insurance and ensure you are an "additional insured." This covers their liability to you for what they break and covers them with temporary housing funds and other benefits if they need it. My tenants pay about $20-$25/month for it and get $100,000+ in coverage. Some want more for their own special property. The "additional insured" puts your name on the payout check with theirs to ensure you get paid for the damage. The tenant can just endorse the check over to you versus run away with it.

The broker is charging 6%/$4,000, but the breakout you mentioned appears to be 2.5% to each side (5% total?). Where is the other 1% + $100 going? My guess is the selling broker which makes this a little imbalanced.

It is the buyer agent you really want to court. You might want to make this 2.5% for the seller agent and 3.5% for the buyer agent. It's not clear who is being paid all of the other fees. For example, $300 for a notary is expensive in my market, but it might be a required expense to the settlement company. Can you do you own notarizing? You don't need a deed prepared if you have your deed from when you bought the property.

Consider interviewing other brokers if you want to find a lower price, but I doubt you will find it in the commission since there isn't much there. You could try selling it yourself and offer 3-4% to the buyer agent to see what you are paying for on the selling side.

I believe there was a PA court decision several years ago that now prohibits the "first, last and security deposit" approach. The focus of the case was on "last". The plaintiff argued that "last" is undefined in a lease that automatically renews and effectively represents a 2nd month of security deposit. PA law limits security deposits to 2 months for the first year and 1 month thereafter.

The workarounds are to request 2 months of security plus the first month's rent at lease signing, then refund the 2nd month of security at the 1 year lease anniversary. That is what I do and almost all of my tenants apply the refund to month 13's rent. Another solution is to write 1 year leases with no automatic renewal such that a new lease is required each year instead of automatically going month-to-month. I think the end result is the same, but more work with new leases every year.

Section 8 leases do not allow the 3 months up front payment approach. They only allow the first month and 1 month of security.

Value is what you calculate the property is worth. The seller has an opinion and so do appraisers, but no other skin in the game. Try to leverage the low appraisals to lower the price, but go with a good deal if you have one. There isn't that big of a difference in the amounts, especially if you are planning it to be a buy and hold.

Think of it another way: how much are you willing to lose the property for? If another bidder offered the seller their price (or any price) and the seller accepts, do you feel like you lost a great deal?