All Forum Posts by: Account Closed

Attend your Landlord Associations if you want to be on top of the game.  They have Lawyers come in and talk free of charge to the group.  They have everything you want and need to know, via speakers, and one on one sharing with each other.  

You need each other.  Who else will know the laws and the rules of the nature of the beast, but others who share the same scenario.  

Nancy Neville

You will setup another bank account called a "Tenant's Security Deposit Trust Fund Escrow Account" at the bank.  You must keep the tenants Security Deposits separate from your own bank account.  (Check your state law)

When you deposit the Security Deposit into the Security Deposit Trust Fund Escrow Account at the bank you will make the Security Deposit in QuickBooks, if you use QuickBooks, a Security Deposit Other Current Liability Account. 

Nancy Neville

Okay.  What all of us want, or almost all of us want, is a software program that WE can keep track of our properties in anyway that we want to.  Steven, your client has a large criteria.  And QuickBooks is doable for him.  We can do anything, almost, that we want to do in QuickBooks as long as we have a CPA or an Accountant that we can turn over our data to. 

You could set up everything above as a class.  And link the transactions that coincide with that "class" and then do a Profit and Loss by Class report to see everything regarding one class or all classes at one time.

The only time you don't want to created a mixture of misposh, is if you have to assign Tax LInes to each of your transactions.  And when you have an Accountant do your books for you, they take care of the Scheduled Tax Lines in their own software program, which enables  you to mix a lot of your various investments into one company file.  As long as you divide it into classes.  

So you could have a class called Landlords and list all the landords as a subclass, or all his properties as a sub class.  Then have another class called Mortgagee's and list those as a subclass of Mortgagee's, and a class called "Share Holders" and list all the share holders as a sub class of Share Holders, etc. etc.  

It's no different then writing this down on paper and handing it over to an accountant.  But makes a big difference if YOU will be using QuickBooks to do your taxes YOURSELF. 

Nancy Neville

Foot Note:  You do however, have to enter this stuff in correctly, because you just can't do stuff that will throw you out of balance.  But what you ask is most definitely doable.

Since he is your client, you most definitely, if you were going to do this for him, create a special company file just for him.  This wouldn't be feasable to do if you tried to have him in one company file with all your other clients.  You could, but it would be too over the top for you to try and do this.  

Ah  very good!

Nancy Neville

Hello Robert:

Time is of the essence when renting a property out.  No time to take home an application or lease agreement and think about it.  Chances are they will never get back to you, and you will be calling them to ask for an update.  The clock is ticking.  Other applicants are waiting. Therefore no 48 hour review or a even a one minute review.  They have chance to say yea or nay at the signing of the lease.  That is why I go over everything at that time.  If they say no, and nobody ever has, I still have other people in line waiting.  And If  I don't have anyone in line waiting, the ad is still running until I have a signed Lease Agreement.

Post dated checks can bounce, and they could do this with the idea in mind that they will get a discount.  And then give you many excuses as to why they thought their check was good.  Just because a check is post dated to the 5th, doesn't mean the check is good.  The eviction starts the day it's not received in my office on or before the 1st.

Remember the Notice to Quit is just a Notice.  You cannot file for an eviction until that notice is sent and is why it is crucial to send it out the day the rent is late.  

They still have 7 days or 3 days, or how many days your state laws says they have to pay their rent according to the Notice.  So it's not like you saying they have to pay it today or today I go to court.  It doesn't happen that way.  But you certainly can't go to court until that Notice has been sent or evict them and time is of the essence.

This is just my two cents.  

Checks can bounce.  Checks can have a stop payment put  on it.  If you are going to give them this deal, then make it work for you.  Have them pay you by Cashier's Check or cash.  But not by Money Orders or Checks. 

Nancy Neville

There is no need to play games and pretend.  YOU are the OWNER, be proud of it !!!   Don't be afraid to face problems head on.    You can't run away from it and hide.  Set the rules and let the Legal Contract-Lease Agreement do the work for you. (by playing games you create a lawsuit against you.  Misleading the public and so much more.)  Once a tenant finds out you lied to them about who you are, your reputation is down the drain!  Word of mouth is good or bad advertisement!

This is what is in my Lease Agreement

TABLE OF CONTENTS

1 Materiality of Application to Rent (Everything on application true ) Page 3

2 Residential Tenancy Agreement - Notice Page4

3 Financial Statement Page 5

4 Deposit and Utilities Criteria Sheet Page 6

5 Utilities and Tenant(s)’s Responsibilities Page 7

6 The Leased Premises Address and how it is to be used & furnishings Page 8

7 Terms of LeaseMonth to Month Page 9

8 Occupants & Overnight Guests Page 10

9 Rent:Where to send payments Page 11

10 Rent:How money is applied Page 12

11 Rent:Late Fees Page 13

12 The Eviction Process Page 14

13 NSF Fees Page 15

14 Pets Page 16

15 Notice to Surrender30 Day Notice to Terminate Tenancy Page 17

16 Holding Over Page 18

17 Security Deposit:How it is used.Where it is held.Forwarding Address: Page 19

18 Security Deposit:Damages Page 20

19 Quiet Enjoyment – Inspections – Photo’s Page 21

20 Alterations Page 22

21 Insurance Page 23

22 Abandonment Page 24

23 Attorney’s Fees, Government Law, Severability, Amendment, Assignee Page 25

24 Additional Provisions Page 26

25 Smoke Detectors, Batteries and Furnace filters Page 29

26 Sewer Drains Page 30

27 Lawn Maintenance – Vehicle Violation Page 31

28 City Ordinance Page 32

29 Delay in Repairs and Miscellaneous Charges Page 33

30 Illegal Use – Hazardous Materials Page 34

31 Address for Notice Page 35

32 General Provisions Page 36

33 Personal Injury Page 37

34 For Rentand Sale Signs Page 38

35 Inventory Checklist Page 39

36 Signing of the Lease Page 40

37 Lead Paint Signature Sheet Page 41

38 Lead Paint Brochure Separate

39 Pictures of Properties Last Page

Notice # 12 The Eviction Process. I make it clear where I stand. It takes about 20 minutes to go over the lease, and how I word what I say and the tone I use makes a big difference in how they take the rules I set in place, especially the eviction process.

My tone is business and not commanding. I explain why I have to do these things and why I have to follow up non payment of rents the way that I do.

It may sound like I am a force to be reckoned with, and I am, but I also tell them what my duties are to them, and what they can expect from me and that is to take care of their emergencies immediately, and their general repairs in the order they are received in my office. I also joke with them and always refer to their rental unit as THEIR HOME and not mine.

You want to be fair, but also make it clear where you stand.

THE EVICTION PROCESS:

First of the month rent is due No matter what crisis the Tenant(s) may be going through. Rent will be due on or before the first of every month. (Allowing for week-ends and Holidays)No excuses will be accepted as to why rent is late.

Second of the month 7 Day Notice to Quit is sent to the Tenant(s) If rent is not received in my office on or before the 1st of the month (allowing for week-ends and Holidays) than rent is late and a 7 Day Notice to Quit will be sent to the Tenant(s) ..No exceptions.

5th of the month.
THIS IS NOT A GRACE PERIOD If rent is not received in my office on or before the 5th of the month, allowing for week-ends and Holidays, then a $25.00 late fee is charged in addition to all monies owed up to this date and a $3.00 per day late fee will be charged from the 5th of the month until all money is received in my office.
If rent is received in my office after the 5th three times in a row, then the late fee will be charged on the very first day rent is late which will be the 2nd of the month and a $3.00 per day late fee will be charged until all rent is received in my office.

10th of the month If rent is not received in my office on or before the 10th of the month that on the 11th of the month I will be filing for eviction for non payment of rent and all legal fees and administrations fees will be charged to the Tenant(s) in addition to all other monies owed.

11th of the Month I file for eviction and all legal fees, administration fees and late fees and all monies owed will be charged against the Tenant(s).

This is a start:   

Help starts by her  taking one step at time.  Call every number, contact every agency, and someone will help her.  She does indeed sound like she could use some good news.  I am surprised her doctors haven't given her some contact information.

http://www.michigan.gov/mdhhs

Being a landlord doesn't mean you are mean and not human!!!  

Nancy Neville

The Tenant Phase by Nancy Neville

THE FIRST MONTH (THE HAPPY PHASE)

During the first month of a rental period, the tenant is happy. They wanted the home, they got the home and everything is fine. THEY ARE VERY HAPPY! You spent a lot of time at the signing of the lease telling them what you expect from them and what they can expect from you. They seemed to be happy and they nodded in understanding.

THE SECOND MONTH

Somehow during the second month, when the newness wears off and the happiness falls into a routine, the new tenants become confused. They seem to forget what the rules are and when rent is due (even though they have a written lease agreement to refer to). If they are one of the few tenants who do not get confused during this time, this means they have jumped from the Second Month phase into the TESTING PHASE which may cause a few problems, but I will talk about that in a few minutes.

To help the Tenants not be confused during the 2ND MONTH PHASE, I always bill my Tenants their rent 10 days before it is due. It's during the 2ND MONTH PHASE that I will answer any questions they have and not make them put it in writing.

TESTING PHASE (May begin as early as 2nd month)

The TESTING PHASE is a very crucial phase. Whether the tenants and you get along is determined during the TESTING PHASE. More Tenants than not like to Test the Landlord. If they had gotten away with it with their previous landlord, chances are, they feel they can get away with it with you.... so they will try. They will pay their rent when they want to, putting you last and live the way they want to regardless of your rules.

It is very important to nip this in the bud during the TESTING PHASE, because if you allow the tenant to get away with things such as paying their rent when they want to and doing what they want, then chances are you will never proceed past the TESTING PHASE.

THE THIRD MONTH:

If you make it to the third month, that is good. But it is also very crucial during this time as well to make sure the tenant stays on course. The Third Month strengthens your position as to who runs what. During this time you want to make sure that the tenant keeps paying their rent on time and keeps obeying the rules. One little falter on your part can throw the tenant back into the TESTING PHASE. It is very important that you guide them during this time as to what you expect and want. It is important that you gain their trust and respect during this time.

THE FOURTH MONTH - THE COMFORT PHASE:

The fourth month through the first year is THE COMFORT PHASE: the tenant becomes accustomed to your rules and is starting to feel comfortable. If you have handled everything correctly, being strong when needed to be, and doing evictions when needed, the Tenant will feel secure because the Tenant will know what is expected of them and will feel comfortable and will want to stay. (Tenants usually feel comfortable with stability and sameness).

AFTER THE FIRST YEAR:

After the first year, the COMFORT PHASE becomes more stable and each year thereafter. It's just a matter of keeping your Tenant happy, yet, making sure they don't slip into the Testing Phase from time to time. Even old time Tenants will want to go to the Testing Phase if they see their Landlord falter, get too over generous or too understanding.

When that happens the Tenant's stability changes because the rules are changing throwing the tenant into the Testing Phase again, so we don't ever want to falter but always stay strong and in control.

THE MOVING PHASE:

During the moving phase the Tenant, no matter how many years they have been with you, seems to forget everything again. They become babies and they revert back to the TESTING PHASE. Once again they never refer to the Lease and must depend on you for answers.

During the MOVING PHASE, the Tenant can change personalities quickly. It's like they drank a potion that changed them from Jekyll into Hyde. They become this fiend, this villain that could destroy you and is probably the hardest phase of all the phases.

It is during the MOVING PHASE, that you must be cool, have all your wits about you and be prepared, yet still be cordial so as not to enraged the monster that seems to be lurking in your Tenant during the MOVING PHASE (as there is NO ANTIDOTE to calm the savage beast once it takes form). If by chance this happens, it is best to not confront the beast but to keep your distance until the courts can set it free!

With time everything will fall into place as long as you treat Land lording as a business!

You wrote a check for $1,000.00 for an Earnest Money Deposit.

It shows up in your Chart of Accounts under Earnest Money Other Asset Account.

Things didn't go as planned and now you need to remove it.  If you lost the deposit you would then make it an Expense Account. 

Let's say you lost the deposit money.  You will need to credit the Earnest Money Deposit Asset Account and debit a Earnest Money Deposit Lost Expense Account.  (Which means you will need to create that expense account in your Chart of Accounts). 

The first line of the journal entry is a credit because you are taking the money out.

The second line is your expense account because you are putting the money in. 

In the accounting world debits and credits are backwards and is why it is confusing to the normal person.  You would think crediting an account would be putting money into that account, but not so in accounting.  (Good Grief)

So let's take a look at our Chart of Accounts now.

We see the $1,000.00 is now gone from our Asset Account and  is now an expenses account (which doesn't show up in the Chart Accounts.  Instead the money shows up in our Profit and Loss Report.)  So let's take a look at the Profit and Loss Report. 

There it is as an expense account.

If you didn't lose the money and nobody cashed the check, then it is just an easy fix.  Just go back into your Vendor Center and void the check and that will void the  Earnest Money Asset Account as well. 

I third the recommendation.  QuickBooks!

Nancy Neville