All Forum Posts by: Account Closed

The mistake that new landlords make is not sending that Notice to Quit the very FIRST DAY RENT IS LATE.  

A NOTICE TO QUIT, is just that.  A NOTICE.  It doesn't go against their credit report.  It doesn't go against them in any way shape or form, UNLESS, they DON'T pay their rent.

My rents are due on the first of every month, even if I have to pro-rate their rent to get it to be due on the 1st of the month.  (I don't want to have to go to court for evictions every single day of the month just because I have different rental due dates.  Therefore I make every ones rent due on the 1st of the month)

If rent is not received in my office on or before the 1st of the month then rent is late.  

My late fees are charged to the tenants on the 5th of the month if not in my office on or before then.    It is not a grace period!  Never!  It is on the 5th that I charge them a $25 late fee.  (this gives them 5 days to get their rent into my office.   If they pay on or before the 5th I tear up the Notice to Quit, and that is the end of that)

If they don't pay their rent on or before the 11th of the month, then on the 12th of the month I file for eviction.  That's when the Notice to Quit now becomes a DEMAND FOR POSSESSION e.g. EVICTION.  In Michigan we cannot count the day our Notice to Quit is sent.  Plus we have to allow 2 full days for mailing.  So on a 7 Day Notice to Quit, we can't even count the days we have to file it in court until the 4th of the month if rent is due on the 1st. So I can't legally file the 7 Day Notice to Quit in a court of law, until the 11th of the month because the have until 11:59 pm. on the 10th to pay it )

You cannot even start the eviction process UNTIL that notice is sent.  The longer you wait to send that notice, the longer your eviction takes.  The longer you get no money.  The longer the tenant gets to stay in your home free.

A NOTICE TO QUIT once again is not an EVICTION, it is a NOTICE to the tenant that you will be starting an eviction per the days allowed per your state Law if rent is not paid. 

I've talked about this before on here in another post, that when you file for eviction on anyone, you should add these words AND ALL OCCUPANTS.   Because note the wording on the Notice to Quit.  It is called a DEMAND FOR POSSESSION.

So what you are really doing when you evict someone is evicting everyone that lives in the house, has possession of the house.  A lot of times we don't how many people are living in the house, e.g., having possession of the house, so you need to add these words so you can evict everyone in POSSESSION of the house, (including the dog)

I tell my tenants at the signing of the lease not to be offended should they receive a Notice to Quit, that it is just a notice letting them know I have not receive their rent yet.  And when you put it that way, they don't seem to get insulted.  

Once again, you can't even begin the eviction process UNTIL THAT NOTICE HAS BEEN SENT.  AND IT HAS TO BE SENT ACCORDING TO YOUR STATE LAWS  REGARDING HOW MANY DAYS IT HAS TO BE SENT!

Nancy Neville

It is important to setup your company correctly and you start by following the Easy Step Interview.

After that you can tweak QuickBooks through the Preference Section to fit your own personal needs.

You will setup your Properties as a Class in order to keep track of income and expenses per building (SFH) and per unit (Duplexes, apartment bldgs., etc.)

When you setup your Properties as a Customer as well, you are setting them up to let you know where each tenant lives.  Therefore 123 Jackson Street is your property, (Customer)  with Jane Doe, being  a Job of that property.

QuickBooks is done in outline form.  In order to Indent, QuickBooks calls it by different names.  

When you indent in the Class Section it is called a "Sub Class"  e.g., Unit 1, Unit 2, etc. 

When you indent in the Customer Center it is called a "Job". 

QuickBooks was created for the Building Industry and is why you have these names, "Jobs".  But aside from having indenting names that don't use the words we'd like to use such as Tenants, or units, it is still a great program for Landlords.  

Once you have your class feature setup with your properties and your Customer Center setup with your Properties as the Header and tenants as a Job of that property (header) you will now assign every expense to that particular property by choosing that property from the Class Column (But you need to turn on the Class Feature in the Preference Section of QuickBooks for these columns to show up on your transactions)

Your rents, however,  will be assigned to a "Rental Income" account in your Chart of Accounts. 

Then all you need to do is run a Profit and Loss Report by Class to see how much money that property made, less the expenses, giving you your bottom line.

It just doesn't get any better than that.

Nancy Neville

When we sold our homes, I made sure the Closing Statements stated that the new owners are responsible for the return of the tenants Security Deposits  (Giving the buyers a discount on the sale price of the home which equaled the amount of the Security Deposit we had on record for this tenant)

It is very crucial when you sell your homes, that this addendum is included in the closing. 

After new buyers took over some of our homes, the tenants would contact us regarding their Security Deposits and I would send them a copy of the Addendum stating the new Owners are responsible for returning their Security Deposit and they used that copy to prove that the new owners indeed were responsible now for their return of the Security Deposit,  if they owed no money or left any damages. 

So everything depends upon what your contract states.

If there is no wording to such an agreement, then you will have to return the full amount of this tenants security deposit.  

However, the tenant does have an obligation to give you proper notice per laws of your state.  If he had given proper notice to the previous owner that he would be leaving on the 1st, than the notice will hold true for you to follow.

If the tenant just decided now, hearing about you being the new owner, a notice, then he must give proper notice or pay for the next months rent (or whatever days are allowed, according to your state law)

Nancy Neville

Neil the more you say the more you hurt yourself.  

A lease agreement is a contract.  It has an amount and a due date.  If tenants don't pay the amount on or before the due date you send them a Notice to Quit.  If they don't pay you take them to court.

Don't complicate your lease agreement by putting in too many clauses, it may come to bite you in the butt.  Amount and due date is all you need to file for eviction. 

Your criteria for selecting a tenant must be within reason, and requiring 4 times the amount of rent is up to you.  I require 3 times the amount of the rent.  

You will know if that is a good thing or not by how many people apply for your rentals. 

Nancy Neville

Yes we most definitely live in a suing society. 

The first thing you need to do is realize that this is a business of managing people.  You need to prepare yourself for all types of personalities.  

You need to prepare yourself for damages, vacancies, and evictions, and lots of injustices, because the Courts, the media, your tenants and even your families, hold you to higher standards because you are a landlord.  (you should know better attitude)

This is a business of taking care of your properties, being responsible for other people lives who live in your homes, and responsible to the neighborhoods, and whether or not their homes depreciate in value or not due to an unkept rental, bad tenants, etc.

If you have a personality yourself that is over demanding, not a good a listener, want things neat as a pin, and want to charge tenants for everything under the sun, you won't last long.  

Plus enter  this business knowing that your goal is to keep tenants long term, and not see how many you can evict during the year.  This takes great skill to keep tenants happy and long term.  (See my blog on Tenant Phase)

So...the first thing to do to not get sued is to know everything about this business.  This means attending landlord associations, landlord/tenant courts, buying books on landlording, investing, etc.  (Write offs).  Study your State Laws and City Ordinances of where your properties are located.  

Next get organized.  Setup your office to where you have file cabinets to hold your tenants records.  

• Document everything you do!
• Put everything in writing.
• Have Vonage Phone (an Internet Phone to keep a log on every phone call and message made to your office and sent from office.  This is Gold when you have to go to court or to prevent having to go to court.
• Get Stamps.com to document every letter you send, what time, what day, and to what person.
• Make sure you follow building codes.
• Take care of repairs immediately  (even some of the smallest of the smallest complaints)
• Be fair and balanced with your tenants.
• Have a good lease Agreement in place and STICK TO IT Don't faulter, or else you will find Chaos

And, for Pete's Sake, get a good software program like QuickBooks to keep track of your Income and expenses per property, to help you know what property is making you money and what properties are causing you grief.  

These are just a few of the things to avoid Law Suits.

Nancy Neville

I always call them back right away and tell them that I had chosen someone else for the rental but only because our policy is the first person who applies and qualifies gets the first chance to take the rental unit. 

However, I tell them, that I have other rentals that they may be interested in and would be glad to show them to them.  If I don't have other rentals available I put them on a waiting list.  And they seem to like that. 

Nancy Neville

My pet peeve as well.  You will find that not all landlords want to stand together to help make change for all of us.  

I had been working with a Lobbyist to change the law regarding "hold overs".  Worked many years trying to get the law to allow landlords to remove a tenant from the property once the lease expired and they didn't move, instead of having to go to court again and have the Judge decide whether or not they violated the contract by not moving.   A Contract is a Contract!  But nobody supported me.  

Nancy Neville

Journal Entries!  Yuk!  Journal Entries are what Accountantss love to use!  QuickBooks was made for the Non Accountants.  It takes care of all those nasty Journal Entries for you behind the scenes.  But in order for QuickBooks to do that for you, it depends on you entering the data into QuickBooks some way, in some form and I do it on the Check itself.

In QuickBooks you have the regular check like our check book and it has the Stub below it.

This is were you enter your expenses and because it's a check it's going to be listed as an expense...a debit.  (Credit in accountant terms)

So you will list all the expenses one by one individually using one line for each transaction.

Then you will enter the minus, (Debits) and put a minus sign next to the amount.  Once QuickBooks subtracts the minus signs from the debits, it will give you the total money of the check. That $7,852.32.

Yes you can do all this on a Journal Entry, but a Journal Entry is sometimes confusing.  What column is the credit column?and what column is the debit column,? and in accounting it is backwards, so no wonder we all get confused. 

But, do it the way you are used to doing it.  If you are comfortable with a Journal Entry then go ahead and do it that way.

Don't forget to link all the entries to the property.

P.S.  This is how I do mine.  Check with your Accountant to see how they want you to set it up.    

Nancy Neville

Break down the credits as I showed you.

Entering Closing Statements in QuickBooks is like balancing your checkbook in QuickBooks from the Bank Statement.  You enter everything exactly as the statements are listed.

So you will enter your Closing Statement showing all the expenses giving you the grand total then putting a minus sign next the credit entries, and then your check that you made for $7,000 should equal the amount showing on the check.

Yes that bottom line shows that's what you paid