All Forum Posts by: Account Closed

I would play it by ear.  

If you send them a non-renewal of lease letter (say that three times real fast), and these units have just been upgraded, you can take it to the bank that it won't look so updated by the time they are through. 

When I took over properties from a seller, I introduced myself to them (tenants) via letter and in person, and I gradually didn't renew leases for those I thought should go, one at a time, not in mass chaos.  I first evicted tenants that had to go, (that came first), and then the others that didn't comply to my new rules, came next by me not renewing their leases. But once again, I did it slowly.  

Remember this though.  The mission of a landlord is to keep tenants long term.  

Tenants need stability.  Once you put into play rules, leases, security deposits, stuff they need to do and know, and you promise to take care of their emergency repairs IMMEDIATELY, and their general repairs in the order they are received, you may have tenants that will never want to leave.  Because they know what is expected of them.  

Don't give them all the stuff they should do without giving them the stuff that they can EXPECT YOU to do as well.  That philosophy goes a long way to make a good landlord/tenant relationship.

And don't be a bully trying to sway them over to new rules.  Be understanding, give them proper notices of the new rules, be patient a little bit regarding the  new rental rates, what is expected of them, and then if they think your rules stink, they'll move, or then you will have to get rid of them. 

But play everything by ear for the first few months.  You will be living there and you will get to know who are the "keepers" and the "losers". 

Don't cut off your nose to spite your face.  (Gosh who ever thought of that phrase)

Good Luck!

Nancy Neville

So the question is Quicken or QuickBooks?  (Quicken- High School   QuickBooks-College)

When you decided to become a Landlord/investor, how much research did you do?  None?  Some? Extensive?

What answer you chose above will determine your success in life. 

Many times I encountered people who would see the home I lived in or the car I drove and wondered what business I was in.  I said I own property.  I am a Landlord.  They would reply, "A Landlord? And that's all you do?  And wanting to set them straight, I struggled to hold my tongue and just smiled and said, "Yes, that's all I do".

Researching anything you are about to spend thousands of dollars on is IMPERATIVE!!! And that includes how you are going to keep track of your net worth!  Those properties you have or intend to buy. 

Do you start off by buying one property?  Or Two?  Or an entire neighborhood?  

Do you start off with paper and pencil, Excel, Quicken or QuickBooks?

So the question is, how serious are you?

Are you satisfied with one property?  Okay just use a pencil and paper

Are you satisfied with two Properties? Okay you can just use  Pencil and Paper, perhaps excel

More than three properties? Thinking about Quicken (because you are a newbie and think that's all you need)

Or are you a person who views your investment not only in real time, but in future endeavors?

If you are this serious to spend tens of thousands of dollars on a home as a rental, you better be

smart enough to invest in the best of everything, and that includes your accounting software.

If you plan to purchase properties and truly become a landlord/investor, then you need to have a software program that will grow with you.  A program that will tell you what properties are making you money and what properties need attention to.  To sell now or curb what's  wrong.

So this is my answer to those of you who ask, Quicken or QuickBooks?

Answer:

If you spend over $1 and you are a business and need to file taxes, and....only have one property, you better have a good accounting data sheet, because there is more to being a landlord than buying a house and renting it out.  You've got the IRS and Auditors breathing down your back. Need I say more.  

Because if YOU don't care to know everything about your investments, what's making you money and causing you grief, (expenses) you can take it to the bank that the IRS wants to know and that, my friend, is a big deal. 

Nancy Neville

Yes Karen:  I have several companies and I have them all in QuickBooks under their own company file. 

QuickBooks online is limited.  I don't recommend it for Investors/Landlords. 

Our Industry entails a lot of detail.  You can Customize the desktop version but not Online.  

The sky is the limit with the Desktop version, unlike the other versions of QuickBooks. 

Nancy Neville

QuickBooks allows you to setup many companies separately. 

QuickBooks can be customized to fit your needs personally almost 100%.

Nancy Neville

There are many numbers one has to toss around in their head and on paper even before you buy that first rental.

You should be first finding the right location and looking at the current rental rate for that area.  Once that is established you need to take into consideration the following:

1. Vacancies
   1. Allow for tenants not moving/holding over
   2. Tenant appealing in court stretching out the eviction process.
   3. Damages and how long it will take to fix the house back up  and get the house back on the market
   4. Is the vacancy in the Spring or in Winter or around the Holidays, or just when school is about to begin?

The above is something no one can predict the length of time.  Each scenario may be different from the other.  Nothing is a sure thing when a tenant moves, either on their own or by force, so you need to just forget about vacancy cost....you'll never figure it out. 

2.  Next you need to take into account.....Expenses 

Cost of damages

Length of time to get it repaired. 

Storage for personal possessions of items tenant leaves behind, (if they are anything other than garbage bags)

Utilities

Advertising

Screening Tenants again

Choosing the correct tenant.  BTW choose tenants that are COLLECTIBLE.  People you can sue if they don't pay or do damages.  The more people you get to sign the lease the more people you have available to sue.  (I don't mean to sound mean, but this is a business and our homes are worth thousands of dollars).  Don't forget Co-signers for those "Iffy" people. 

With 40 rental properties ranging from apartments to single family homes, I allowed $100.00 per door for repairs and vacancies.  40 rentals equaled $4,000 a month I stashed away into an Escrow Account.  

Now, we  know that I won't have a hundred dollars worth of repairs on each door (rental) a month, but I will have some repairs to do on some of those rentals.  Some may be only a few bucks, some may be quite pricey, such as  a new roof or furnace. 

All you can count on during vacancies is your talent to get that house rented out asap.  This entails, 

Great Curb Appeal, and during the Holidays, Advertise Holiday Specials.  Better to take a loss of a hundred bucks a month during school time and holidays, then having ZERO rent during the hard times.  

Nancy Neville

I agree with Joy Mondala.  Always, always, always, oh did I say ALWAYS, have everything in writing!!!!   A Judge doesn't want to hear "She said this, and He said that".  All they are interested is in EVIDENCE!!!!!!

Nancy Neville

The State of Michigan says that a landlord can only collect one month and a half rent as a deposit.  Example.  Rent is $800.00 a month.  The Deposit would be $800.00 plus $400.00.  ( A month and a half rent).  

In Michigan, anything called a deposit is considered a "Security Deposit", e.g., Pet Deposit, Cleaning Deposit, etc.  If  a "Security Deposit" of $1200.00 is allowed as the maximum Deposit one can charge, based on the $800 per month rental amount, then you can't have a Pet or Cleaning Deposit if it goes beyond the $1200.00. 

However, you can called it a non-refundable Pet Fee or Cleaning Fee.  (getting off topic here)

Each State may have their own rules on how much Security Deposit you can collect.  Check it out before you charge anybody anything, because you could face yourself in trouble by trying to "double dip".

Nancy Neville

A Lecture for New Investors by Nancy Neville

Okay, I understand it.I’ve been there.You’re tired of working for somebody else.You want to be your own boss.You want to make money.Houses are still selling rather cheap, depending on the area, and you think, now is the time to become a Landlord!Just buy a house, rent it out and money rolls in, just like that.

I’ve been on Bigger Pockets for several years and I cringe when I read that someone has just bought a house or a duplex, or a 4plex and they are soooooo excited, that they are about to burst, and then they ask the question.“WHAT DO I DO NOW”?

Oh my goodness!You mean they’re asking this question now, AFTER they purchased a home!Yikes!!!!

I see more and more people buying buildings for rentals and don’t have a clue what to do with them once they have them.

Being a Landlord is a very serious business!!!!I can’t stress this enough.The life of a landlord can be exciting and challenging, but it is 24/7 and it is a business of people management, and doing things legally and doing things right, and making decisions, bad or good.

This is a business of evictions, of fires, of break in’s, of damages, of being responsible for other people’s lives.What THEY (your tenants) do affects YOU!

There are laws to follow in order to make your building legally rentable.One is to have a C of A(Certificate of Acceptance) this is decided upon by the state, or county or city where you live.They have to approve this home to be a rental.Then you receive a C of O (Certificate of Acceptance) decided upon again by the local or state or county authorities. This states the home has been approved and available to be a rental.And some of these must be applied for every time a tenant moves.So check your state laws.

There are Landlord Tenant Laws, Building Codes, and laws that are not laws at all but based on a Judge’s opinion of whether or not a tenant did wrong or not.For instance, normal wear and tear.Judges have various opinions on what they deem normal wear and tear.

This is an Industry of thinking skills.This is an industry of holding your temper and implementing your lease agreement no matter what.You need to think like a Judge.You need to think reasonably.

You need to be a good listener.You need to be in control.

Once you buy a house you need to know how to keep that house and how to keep your tenants long term.

You need to know how to be all things in order to keep your tenants happy, yet make them know the rules of landlording and how to be good tenants.

I always say that one is only as good as the tools they have.You could be the greatest landlord in the world in mind and action, but if you don’t have the equipment, or the education, or the money to invest in the proper tools to make you successful, then you will never make it in this business.

It takes my breath away to read the stuff on here by new investors.And I understand that how can they know what they do not know?That is why I wish there was a Sticky Note on here for New Investors to post posts like mine (and maybe there is and I just don’t know it) that tells them to Read This First before Investing!!!

My husband and I were very successful in the business. (We are retired now due to his cancer). But we owned a huge house.And every time someone would come over and do work on something on the house, they would ask, “Wow are you a doctor?” and I would say no.And they would ask, “A lawyer?” And I would laugh and say no.I’m just a Landlord.And they would say, “Wow and that’s all that you do?”And I’d laugh again and say, “Yep that’s all that I do”.And they would reply.“Wow, I think I’ll become a landlord too”.

And that is the mindset of a new investor. When I say that’s all that I do, let me tell you what to expect in the life of a landlord and all that they do.

• 3 am Christmas Eve Tenants call-Furnace went out.I get up, phone calls made, emergency call, expensive triple overtime to the Heating Contractor, Tenant has heat. Tenant Happy.Landlord sleepy.
• 2 am Fire Dept. calls.Fire at such and such a place.We get dress. Blizzard outside.Drive to the home.Access the damages.Look at the big hole in the roof from the fire dept.Plan our strategy.Talk to tenants. Get our guys out to put a tarp over the roof.Meet in the morning with everyone to solve the problem, what to do with tenants, whose fault, where to go from here.
• You have tenants parking their cars on the lawn
• oHaving unauthorized guests
• oDoing Drugs
• oHaving a dog they shouldn’t have
• oHoarders
• oComplainers
• o(In my case…drive by shootings, bullet holes in rentals, thievery)
• oWater abuse
• oDish on roofs when forbidden to have one on the roof
• oAnd so much more
• On top of being ready to take care of emergencies any time night or day, and solving tenant issues. You need to also take care of the following.

• 1.Fixing up a vacant rental so it can be rented out again.
• a.We had handy men to do most of this, but with 40 rentals my husband and I had to pitch in a do the labor ourselves as well.
• b.I would paint the house and garages.
• c.Husband would fix the repairs inside
• 2.I would take care of the tenants.This entailed
• a.Taking care of advertising the homes (usually we had more than one vacancy at a time)
• b.Taking phone calls and screening tenants
• c.Scheduling open houses
• d.Staging the house
• e.Interviewing the applicants
• f.Making sure I double checked their application forms
• i.Criteria
• ii.Employers
• iii.Verifying funds and income
• 3.Typing up the lease and making sure they understood the lease
• 4.Then making sure the Tenants abided by the lease agreement
• 5.Paid their rent on time
• 6.And sent that Notice to Quit for Non Payment of Rent the very first day rent is late.

On top of that I did my own evictions and I never lost a case and I dealt with the 36th District Court in Detroit.I won because I covered my butt by having everything in writing.I documented everything.Every phone call I made to them and every phone call they made to me.

I never complained to a tenant because they called regarding a repair.I listened when they told me they couldn’t pay their rent, but even though I understood their problem, I made them pay their rent anyway.

Landlording is about making tough decision and doing things you don’t like to have to do.

Landlording is a Business.

You have to not LOVE YOUR HOUSE.I can’t stress this enough.If you don’t know or understand that this is a business of evictions, damages, and injustices, and fixing this house up over and over again, you aren’t going to be happy let alone successful.

How I wish I could be there for every new investor to help them understand what it’s like to be a landlord BEFORE YOU INVEST.But I can’t and that’s really a shame because it something every new investor should dig into before they invest.

One last thing. Yes you need to have an accountant to file your taxes for you at the end of the year. Our industry involves huge sums of money in our rentals and other people's money. An Accountant knows how to get you back more money at the end of the year because they know the tax laws, not you! So please don't be cheap and try doing it yourself.

Nancy Neville

If you go in 50/50, the tenant, if evicted (or not) may think they are entitled to the vanity when they move.  Especially since they paid half and being evicted.

The vanity is nice.  Nothing wrong with it.  If the tenant would like a new "this or that", I always say, Sure, but it will make your rent go up $10 a month (or more) depending on the cost of the upgrade the tenants want to have.  No problem giving them what they want, but it raises the rent. 

This shows you are agreeble to making them happy, but there is a price for happiness. 

Nancy Neville

Michael, when you turn on the "Class Feature" in the Preference Section of QuickBooks, you will see an extra column on transactions that say "class".    You will then choose the property that coincides with the bill or payment you are using. 

Nancy Neville