All Forum Posts by: John T.

Call her on the telephone or meet with her face to face and discuss the matter.  Find out what her story is.  Maybe she intends to pay before moving in or maybe she wants out of the deal. 

If she moves in and refuses to pay first month's rent and security deposit, then serve her with a notice to vacate or a notice to pay or vacate.

@Peter J Struck Pray that no one drowns in your pool.  In my opinion, a swimming pool in a rental is a liability trap.  Further, I can't imagine the average tenant taking the time to properly maintain a swimming pool.  

@Josh Corby Many of the other posters have thoughtfully suggested that you budget money for expenses and capex.

I agree.  You should establish reserve accounts to pay for inevitable operating expenses and capex. I budget and fund each account on a monthly basis. I use four reserve accounts:

Tax Reserve - to pay real estate taxes
Insurance Reserve - to pay for Landlord's Insurance and Umbrella Insurance
Replacement Reserve - for capital expenditures (I sometimes use it for maintenance and repair expenses also)
Other Savings Reserve - a contingency reserve

@Josh Corby You may wish to review the 50% Rule:

The 50% rule recognizes that throughout the United States, operating expenses run 45% to 50% of the gross rents for rental properties. Operating expenses include all the expenses that are associated with operating your rental business, but DO NOT include the mortgage payment (principal and interest and PMI). Operating expenses include (but are not limited to): taxes, insurance, management, maintenance, entity maintenance, advertising, utilities (at least during vacancies), legal fees, damage done by tenants (over the security deposit), vacancies, setouts, lawsuits, and capital expenses (not technically an operating expense).

Stated another way, the 50% rule, which is generally considered to be fairly close to actual expenses, states that …

50% of your gross rents will be taken up by expenses, such as
property tax
insurance
vacancy
property management
maintenance
capital repairs
legals and accounting.

From the remaining 50% you service your debt, if any, and the remaining is your profit. It is a guideline. After a number of years you will get an idea of the percentage of expenses for your property, but experience shows it will be close to 50%. Note that private mortgage insurance (PMI) is part of the debt service.

Another way to look at the 50% rule is to consider the FOUR COSTS ASSOCIATED WITH HOLDING A RENTAL PROPERTY

1 - RENT LOSS

Vacancy
Non-Payment

2 - CAPITAL COSTS
Capital Costs

3 - EXPENSES
Property Taxes
Insurance
Maintenance
Property Management
Turnover Costs
CPA/Attorney
Utilities
Lawn Care
Etc.

Rent Loss, Capital Costs and Expenses equal approximately 50% of gross rentals

4 - DEBT SERVICE
Principal
Interest
Private mortgage insurance (PMI), if any

Your PROFIT remains after deducting the FOUR COSTS ASSOCIATED WITH HOLDING A RENTAL PROPERTY

Here are two books you might buy and use in your rental business:

1.  What Every Real Estate Investor Needs to Know About Cash Flow... And 36 Other Key Financial Measures, Updated     Edition by Frank Gallinelli

2.  Real Estate Investor's Guide to QuickBooks Desktop or Real Estate Investor's Guide to QuickBooks Online, both books sold by Online Accounting

I had to fire a PM once (the only one I ever had) because:

Improper bookkeeping

Slow in paying rent

Inadequate tenant screening

Lucky for me as a SFR Landlord, my Tenant's are responsible for their own electric, natural gas and other utilities. So, the Tenants get to eat the rising cost of electricity and natural gas; not me.

There are winners and losers in periods of high inflation. Generally tenants and working class people are the big losers. The purchasing power of their paychecks goes down, down and down. The winners are people with money and the owners of tangible property, like real estate. The purchase price and rent of tangible goods, including real estate, increases during periods of inflation. Between 1977 and 1981, during the Jimmy Carter inflationary period, people with money could make up to 7% per annum in a passbook savings account. At the same time, first time home buyers were paying over 15% interest on their home loans. By the end of the Jimmy Carter presidency the prime rate was over 15%. In 1981, Ronald Reagan became president and he had to intentionally put the U. S. into a steep recession (1981-1982) to break the back of inflation.

No matter how compassionate a Landlord is, during times of high inflation a Landlord, who is responsible for the Tenant's cost of heating, must pass the cost on to the Tenant. In setting rents, the Landlord must consider the future diminishing value of the dollar and raise rents at every opportunity. The Landlord must do so just to stay even. Otherwise, the Landlord will be destroyed by inflation.

@Seth Borman As other stated, you might try having a plumber or HVAC repairman clean out the interior of your Dryer exhaust vent.

Also, if your Dryer exhaust vent runs more than 8 or 10 feet in length, you might try having a plumber or HVAC repairman install a dryer booster fan.  I had a dryer on the ground floor that ran upwards through the wall along the ground floor and the second floor and exited through the roof.  My HVAC repairman said that as a dryer gets old it doesn't pump out enough pressure to properly vent the heat up and out of the roof.  This caused the dryer to overheat.  Therefore the thermostat in the dryer turned off the heat and it took a long time to dry the clothes.  My HVAC repairman installed a Fantech DBF110- Dryer Booster Fan and now the dryer works perfectly.

@Nathan Clark

Check out Paragraph (b) below:

Texas Property Code

Sec. 92.054. CASUALTY LOSS. (a) If a condition results from an insured casualty loss, such as fire, smoke, hail, explosion, or a similar cause, the period for repair does not begin until the landlord receives the insurance proceeds.
(b) If after a casualty loss the rental premises are as a practical matter totally unusable for residential purposes and if the casualty loss is not caused by the negligence or fault of the tenant, a member of the tenant's family, or a guest or invitee of the tenant, either the landlord or the tenant may terminate the lease by giving written notice to the other any time before repairs are completed. If the lease is terminated, the tenant is entitled only to a pro rata refund of rent from the date the tenant moves out and to a refund of any security deposit otherwise required by law.
(c) If after a casualty loss the rental premises are partially unusable for residential purposes and if the casualty loss is not caused by the negligence or fault of the tenant, a member of the tenant's family, or a guest or invitee of the tenant, the tenant is entitled to reduction in the rent in an amount proportionate to the extent the premises are unusable because of the casualty, but only on judgment of a county or district court. A landlord and tenant may agree otherwise in a written lease.

ALSO, require your tenants to have Renters Insurance so that their insurance will pay to put them up in a hotel.

@John Kaspar  

A Landlord can't force a Tenant comply with the Lease. If a Tenant tells me that he is terminating the lease early, I just accept the fact that the Tenant is leaving.

In general, a Tenant who terminates a lease early is in breach of the Lease. (There may be statutory or other exceptions.) The measure of damages is the remaining rent due under the Lease. However, the Landlord has a duty to mitigate the Landlord's damages by re-letting the property in a reasonable period of time.

This is the procedure I follow for early Tenant termination of Lease:

First, I maintain a professional, friendly, and empathic relationship with the Tenant throughout the process.

Second, in discussing the matter with the Tenant, I tell the Tenant that I don't agree or consent to the Tenant moving out early and that we will handle the matter according to the Lease. I do not counsel the Tenant on the rights and liabilities of the parties, other than to say we will handle this matter according to the Lease and applicable law.

Third, I immediately send the following letter or email to the tenant:

Dear Mr. & Mrs. Tenant:

Reference is made to _____ [Insert matter referenced, e.g., your telephone call of January 1, 2019,} wherein you notified Landlord that you intend to unilaterally terminate the Lease covering 123 Main Street, Omaha, NB 34664 before its expiration date.

LANDLORD DOES NOT AGREE OR CONSENT TO EARLY TERMINATION OF THE LEASE. Based on all of the facts and circumstances known to Landlord at this time, if you unilaterally terminate the Lease, you will be in breach of the Lease.

The rights and liabilities of Landlord and Tenant with respect to early termination of the Lease are set forth in the Lease and in applicable law. It is the policy of Landlord to strictly resolve all matters relating to early termination of a Lease in accordance with the Lease and applicable law.

This letter does not amend or modify the Lease in any manner. Please call me if you have any questions or comments.

My lease provides that the Landlord may deduct the "cost of re-letting the property" from the Security Deposit. So, basically, the Tenant forfeits his Security Deposit to the Landlord.

You should seek legal advice, or at least review your State's Landlord and Tenant Laws and your Lease, to determine whether this procedure is appropriate in your State.

I hope this helps you.

I read the story.  I'm speechless.