Do-It-Yourself Landlord's Blog

Delivered the good news of a rent hike to the tenant. Hand delivery. Got a verbal confirmation of acceptance. It was a pretty modest raise in the rent, so there shouldn’t have been any issues. Especially considering how far below market the rent actually is.

They had no qualms with the increase.

So the proper documents will be drawn up in the next couple of weeks for the new lease. In the meantime, a copy of the letter goes in the file. Done. But not as done as I initially thought.

Two days after agreeing on the new rent I got a phone call. Leaking toilet, but nothing that a shallow pan wouldn’t be able to handle over the next 24 hours. It was early evening so I agreed to drop by the next day, on my day off, to take a look. No big deal.

When I arrived the next day, just after noon, the front door was wide open and fans were blowing every which way. It was close to 100 degrees outside, so this wasn't being done for the sake of fine breeze. The smell inside also indicated some previously-standing water. It had that "tap" scent which you usually only smell in basements or well-houses. Apparently, some time in the early a.m., the high pressure hose which runs from the valve off the wall to the bottom of the toilet's filling tank, cracked a connection and began blasting water all over the bathroom.

Into the hall.

And half a bedroom.

Fantastic. My simple plan to replace a hose, maybe an o-ring or two, and then carry on with my day was effectively drowned right then and there. Luckily it didn’t take too long to get things sorted out. The cost of renting a wet-dry vacuum and a steam cleaner are going to be removed from the next month’s rent check, no problem.

There’s no accounting for inconvenience, but then again, there’s no accounting for plastic fatigue on a toilet hose either. Next time I’ll discuss what all I saw whilst surveying the damage brought by the spewing toilet line.

The first step in deciding how much to raise the rent for my tenant involved some simple math. Knowing that I was renting below market, and that I really wasn’t intending on stacking a 25% increase on the Tenant all at once, because again, I really like this tenant, I made some back-of-the-envelope calculations involving the total increase in property taxes.

The total hit I’m taking from the tax-man is an extra $600 per year on the duplex. So that’s $300 per side, per year. Boiling down to $25 per month, which should be pretty easy to swallow, and I’ll leave it at that. But obviously, I could have taken this opportunity and treated it like the proverbial bandaid-ripping by stacking some other accrued/planned costs into this rent hike.

Other possible reasons for bumps in rent that could be similarly calculated:

1. adding to or starting (!!!?) the maintenance contingency fund
2. beginning savings for a beautification project like landscaping
3. put toward paying off an uninsured disaster of some sort
4. put toward a new amenity such as washer/dryer, screen doors, or skylights.

Although, with that last one, I’d recommend buying and installing the amenity first, and then using their use of the thing to justify the rate hike, accepting the risk that they may choose to leave as a result.

Set with the $25 bump in rent, I composed the following letter to be sent via email AND by hand delivery. I coincided the increase with the renewal of the lease, as it wouldn’t make much sense to try and renegotiate a loaded lease in mid-stride. File the letter along with whatever documentation of acceptance you receive (new rental agreement, amendment, spit-shake). Best to get as long a paper trail as possible with these things.

I hand delivered the letter in order to garner an immediate response from the tenant. Otherwise, I would have to requested some other form of written acceptance.

Begin Letter------------

DATE <-- EXTREMELY IMPORTANT TO DATE IT

TENANT NAME and CONTACT INFORMATION

Dear (use all tenants’ complete names here for professionalism):

This letter is being forwarded to you as a notification that as of October 2006 (by the 5th of the October), your monthly rent will be increasing an additional $25.00 per month, to help keep up with the recent rise(s) in property taxes. It will move from the current rate of $XX00.XX per month to $XX25.XX per month.

For clarification, August and September rent will remain at $XX00.XX..

In the most unfortunate event that you do not wish to continue living on the premises by these terms, I will understand. But please notify me as soon as possible concerning when you would like to move so that we can make the proper arrangements.

If you choose to accept this increase in rent, this letter will be followed by an amended lease renewal agreement.

Best regards,

YOUR NAME and CONTACT INFO - SIGN IT!!!

------------------ End Letter

Next will be their reaction to the increase.

As sort of a follow-on to the previous post, which introduced the possibility that some Landlords might be playing too nice with their tenants, there are horror stories of bad Tenants as well. Lessons to be learned.

Here’s a quick one from Money Shaker about an exceptionally long term tenant they heard about whose deposit probably got taken for… deposit? Yep. This is a reminder that YOU MUST FIND SOME WAY TO PERIODICALLY INSPECT YOUR PROPERTY. Without being unnecessarily nosey. It’s not that hard to do.

For Tenants that show a mixed desire to pay rent (late, partial, deferred, whatever), there’s an obvious problem with their attempts at making good on signed contracts, and there’s an increased probability that they’re eyeing a bankruptcy filing. If they succeed in doing so, it will undoubtedly complicate your life immensely (see here). Not to pile problems on a financially burdened soul, but it isn’t your responsibility to mend their situation. Get that eviction going before the other shoe drops.

If you do find yourself in a situation where you feel that a mid-rental-contract eviction is warranted, consult your local authorities (State mostly, but perhaps City, County, or Municipal, depending on jurisdiction) to see if there are any special procedures required to get that ball rolling. Perhaps consider drafting a “Five Day Notice�. After all, the law will only follow a proper paper trail. For a general checklist, here’s a good site.

For really extensive public news on evictions (around the world, as much eviction coverage seems to focus on England), go here. That might make you feel better about your situation. Mass evictions on that site, along with references to stories like this one about a North Carolina Congressman and his rather lax, nay, almost vacant form of Landlording. Wow.

Here’s what you want to avoid allowing to happen, where courting tragedy for too long had horrific consequences. Sheez, that sounded rather dramatic, didn’t it?