Dallas-Fort Worth Real Estate Investor Club

Landlords - what would be fair?

  • 19 Oct 2016 8:58 PM
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    Message # 4314336
    Deleted user

    I have a lease that will expire the end of this year. The tenant has said that he plans to renew. What he doesn't know yet is that I intend to raise the rent by a whole $50 a month. He knows that he got a good deal when he leased this 3/2/1.5 SF property for less than he was paying for a downtown apartment. Even a $50 increase is still a really good deal now.

    But he has asked me to do something about the refrigerator. He says it leaks - first I've heard of that! I asked him how long it's been leaking - he says the whole time. 10 months without telling me?!  He also doesn't like it because it doesn't have an ice maker.  Both the ice maker and the leak (which must be inside?) are easy enough to fix! He said he's just tired of it and wants a new one.  Mentioned something about going in halves...

    I could easily say that he has neglected his obligation to inform me as soon as he's knows something isn't working... but this guy has been the best tenant I've ever had. 

    When I tell him the rent is going up, I expect he's going to use this as leverage. I never wanted to provide a fridge in the first place, but I was in a tight spot back when the last tenant leased it and so I gave in.  I bought the fridge new and it's not even two years old.  

    Can anyone suggest a way that I can hold the line on this one so it's still a win-win?  I can't imagine how going in halves would work. So, what? When he moves out, he takes half of the fridge?! Besides, I don't have space to store a refrigerator?  (Anyone want to buy it?)

    Perhaps I should tell him that I'm raising the rent $100 and that will cover my butt a bit on a new fridge? Please tell me how *I* can leverage this...

    Thanks for your speedy replies!
    Paula
  • 19 Oct 2016 9:24 PM
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    Reply # 4314347 on 4314336
    Robin Carriger (Administrator)
    Is the fridge still under warranty?  I assume not.  Do you have a home warranty on the house?  I'm guessing you don't.  In that case, you might consider hiring a handyman to just fix it.  However, you would also want to ask the handyman if he can tell what caused the problem with the fridge and/or the ice maker.  If the tenant's lack of communication with you about the leak and the ice maker might have contributed to the problem or if the refrigerator's warranty expired at some point over the last ten months, then it might be right for the tenant to share in the cost of the repairs.


    With property taxes having gone up so much this year, it's not surprising that you're increasing the rent.  As long as the house is in a decent area where you can rent it to someone else if your current tenant moves out, you should be in good shape.  As far as your tenant using the refrigerator as leverage on you regarding the rent, I'll just say that I no longer even discuss rent increases with tenants unless they decide to call me after they get my rent increase letter.  I'm never unreasonable when I increase the rent, and, if the tenant complains, I simply give them a very logical, business answer.  The last time a tenant complained to me about a rent increase, I tactfully told him that, even with the increase, his rent was still well below the market rent rate in the area and that I didn't want him to move but if he felt he needed to move out that I'd be able to rent it to someone else fairly quickly for about $100.00 more per month.  Despite a solid 15 minutes of complaining, he didn't move, and he's still renting the same place from us today.
  • 20 Oct 2016 6:41 AM
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    Reply # 4314848 on 4314336
    Bill Barton

    I agree with Robin.  My suggestion, run it like a business, be professional, follow the terms in your lease and don't get sucked into personal situations.

    There should be language in your lease that specifies how a tenant communicates maintenance issues and what maintenance they are responsible for.  My opinion, even if you offer a refrigerator, which I don't, you shouldn't take responsibility for repairs.  

    Price your rent based on the market, period.  If someone is paying under market rent $50 is a good step to moving them in the right direction.  They have to find a new place, pay for moving, put up new utility deposits...if they really do move over $50 mo, if that's the real/only reason, your probably better off making a change.

    This may be a good opportunity to update your lease and have a discussion/reminder about responsibilities and maintenance.  It's also a good idea to leverage the lease renewal to update any condition report you have on file, especially if you haven't been in the unit for a while.

    Hope this helps,

    Bill

    Bill@BillBuysHomes.com

    214 997 6565
  • 20 Oct 2016 6:57 AM
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    Reply # 4314877 on 4314336
    Jesus Galaviz

    Call Terry Hutchison with Hutchison Appliance Repair 817-454-1402 and he will get your fridge fixed, and he *may* be able to install an ice maker.  

    If a tenant wants a new appliance because they're tired of the current one, I would generally say no.  He could buy his own fridge, but the current one would have to be stored on site since you don't have a place to put it, and it would be wasteful for you to sell/give it away.

    Go ahead and send him the rent increase letter.  Like Bill and Robin said, explain to him he's getting a good deal and his options are open.  You're not running a charity, and you don't need to give away free rent credits.

    Living in a good property with a good landlord at a reasonable rate with responsive maintenance calls is a win-win for him.  You could also send him a $25 Visa gift card with his renewal to sweeten the deal a bit more.

    comanche3000@live.com
    979-450-1994
  • 20 Oct 2016 6:40 PM
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    Reply # 4315954 on 4314336
    Deleted user

    I think all responses are spot on with their replies... I would get a handyman to fix the fridge and raise the rent $50. If he balks at the raise I would do what the others have suggested however (and this is where my opinion varys slightly), good tenants are gold, so if he says $50 is unacceptable, you may consider cutting the increase in half just to appease him as a good tennent. Any tennent who pays rent on time every month and takes care of my home is worth the delta with the price increase IMO. 

    Brian R. Baker, MBA
  • 21 Oct 2016 8:36 AM
    Quote
    Reply # 4316655 on 4314336
    Deleted user

    Thanks for all the replies on the side of reason. :-)  That's what I needed to hear/be reminded of.

    As an update, he has said "no problem" to the $50 rent increase. He still thinks we can somehow arrange a deal to go halvsies on a new fridge. I will at least let him tell me what he is thinking along those lines to hear him out. But my stance will be to ask him to let me get the fridge fixed, even adding an ice maker - immediately - and then see if he's still unhappy with it. 

    He says it's loud and he's tired of it. From past repairs, I'm pretty sure that can be fixed, too. I did have to exercise my rights under the original one-year warranty three times (BUT I suspect the tenant at the time actually caused some of the problems). This noise sounds like more of the same - the fan gets unseated somehow... 

    I told him yesterday that he's always had the option to provide his own fridge. (But then there's the storage issue.) So if I can't get it fixed to his satisfaction, it will be his responsibility to do something else. I'm responsible to get it in working order per the lease, but a new purchase would be hard to justify as long as I've maintained my end of the deal. I like the suggestion of a gift card. I will contribute that much to a new fridge. ;-)
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