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well we have a storage room in our condo rental and we keep telling the tenet not to live in there but the tenent keeps having his friend live there so when we do checkups he is not there and they turn it into a storage room but we know when are gone they turn it into a bedroom, we are afraid if something happens in that room like the floor gets crack or damage they might sue us and we just want to protect ourselves

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Question regarding washing machine appliances (new vs used w 90 day warranty):

Previously, I have been buying new appliances for my rental units and am now considering purchasing from the used appliances store that offer 90 day warranty.

I know there is a risk in purchasing used appliances but wanted to get feedbacks on people's experiences.

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RagingBull said:   well we have a storage room in our condo rental and we keep telling the tenet not to live in there but the tenent keeps having his friend live there so when we do checkups he is not there and they turn it into a storage room but we know when are gone they turn it into a bedroom, we are afraid if something happens in that room like the floor gets crack or damage they might sue us and we just want to protect ourselves
  You write a default letter to the tenant giving him the appropriate number of days to cure the default (generally set by statute). Be sure to have the letter properly drafted and served to the tenant citing the specific lease provision(s) violated and the cure date. If the tenant does not comply, or partially complies, you then commence an eviction proceeding. Generally speaking, unless you are negligent in some way, you will not be liable for the tenants' guest damages, but do note that you can be sued and will have to pay to defend the suit if any commences regardless of how the suit is disposed.

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rufflesinc said:   
vadeltachi said:   
RagingBull said:   For property owners out there, does the landlord insurance cover liability like if there are structural damage to the building and one of the tenents got hurt because of it our insurance will cover that?
  "Structural damage" from what cause? How did the tenant get hurt? What is meant by "building"?  What kind of building and how much of it does the landlord own?  There are many, many variables, but, in general, your liability insurance generally covers your negligent acts and failures to act.  

  can you give some examples of scenarios that liability ins will cover, and won't cover? I've heard that insurance won't cover work that didn't have permits pulled.

  Let's say, for example, that you fail to timely fix a heaving sidewalk panel that you own and are required to maintain (failure to act). If your tenant trips over that heaved panel and suffer damages (medical costs), he can sue you for those costs. The insurance company will likely cover the cost of the defense and settlement or judgment as may be the case. In another example (your act), let's say that you did some electrical work on the HVAC system, work that requires a permit and inspection. The work was simple, and you did similar repairs elsewhere with no issues. The HVAC unit burns and damages the tenant's property (ignoring your property for this example). The tenant could sue you for the damaged property and, if your insurance discovers that the work was not permitted or inspected, it likely will not defend the claim. In the first example, it's pretty easy to see the heaving panel and know that it needs to be repaired. It's a fairly easy negligence suit, especially if you were on notice of the fault, and most of them get settled out of court. The second case is more complex, but since we assumed you did the work and that fact is discovered, you would likely not be covered under the insurance company's standard reservation of rights letter they will send after the claim is filed. In general, one must be negligent for liability to result, and there are many forms of neglect and liability -- which can be both costly to defend and costly to remedy, especially when claims of pain, suffering and related damages are included in the judgment or settlement as may be the case. It gets a bit more complex if you, for example, buy a rental property and do not know or discover that there exists unpermitted work leading to a claim. However, if you obtained a home inspection on the property before acquiring it, and no deficiencies were noted, that would be a mitigating factor that the insurance company would consider in making its decision to defend the claim. In all cases, an insurance policy is a contract and it's an excellent investment of time to thoroughly read it and clarifying anything that's not clear, especially in the exceptions or not covered clauses. A good example is flood damage during by a hurricane. Wind damage, but not unrelated water damage, is covered. Let's say the roof is damaged by the wind. Usually covered. But if the water surge enters your unit, generally not covered  Few know this, and after a disaster is too late to discover this fact. As to liability, the landlord's liability policy will generally not cover any of this example since the landlord was not negligent (did not, of course, cause the hurricane or any of the damages to the tenant or his property).  It gets very complex in common-interest community claims, since there are many parties involved in any claim and, often, many different insurance companies and policies.

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Insurance companies are a$$holes. My insurance tried to decline a claim for a slow water leak that happened over a period of time. I got them to pay for 14 days worth of damage. I shouldn't have had to ask for 14 days of coverage, but I proposed the scenario of what if I was on vacation. That is when they told me they would cover 14 days, so that is what they covered. The initial claim, was 5k, but in the end, they wound up paying 15k. Insurance was NOT cancelled, and did NOT go up in premium. That was with Nationwide Commercial.

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drew2money said:   Insurance companies are a$$holes. My insurance tried to decline a claim for a slow water leak that happened over a period of time.
  What was the source of the leak?

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It was water heater. It was one of those appliance type in white box, located in kitchen. Started leaking, and initially went into subfloor, wasn't detected until it did a lot of damage.

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drew2money said:   Insurance companies are a$$holes. My insurance tried to decline a claim for a slow water leak that happened over a period of time. I got them to pay for 14 days worth of damage. I shouldn't have had to ask for 14 days of coverage, but I proposed the scenario of what if I was on vacation. That is when they told me they would cover 14 days, so that is what they covered. The initial claim, was 5k, but in the end, they wound up paying 15k. Insurance was NOT cancelled, and did NOT go up in premium. That was with Nationwide Commercial.
  I don't disagree with your "a$$essment" but I am surprised the loss was covered. Most slow leaks are not considered covered perils in most insurance contracts. If the water heater or a connected pipe burst, that would be covered (vacation or not).  Keep in mind that insurance companies are businesses, just like landlords, and they are are in business to make money (even the so-called mutual insurers). The companies employ legions of attorneys. In the case of Nationwide, they own entire law firms that do nothing but litigate claims and have extensive experience in either denying claims or settling the ones they do pay which appears to be what happened in your case.

As an aside, I consider water heaters disposable goods and replace them every four years as a routine matter. I don't like to waste useful things, but used water heaters here are recycled as white goods. Moreover, the waste from a water heater leak is much more and little of that soaked debris can be reused or recycled. It's too bad that water heaters are not (always) required to be installed in such a way that their inevitable leaks are better contained.

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vadeltachi said:   
 
As an aside, I consider water heaters disposable goods and replace them every four years as a routine matter. I don't like to waste useful things, but used water heaters here are recycled as white goods. Moreover, the waste from a water heater leak is much more and little of that soaked debris can be reused or recycled. It's too bad that water heaters are not (always) required to be installed in such a way that their inevitable leaks are better contained.

  FOUR (4) years? That seems like a lot when most here are used 10-20 years routinely and can cost $300-$500 installed.  But then again most here are installed in the basement next to a drain.

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Four years seems quick to me too. You sure you aren't throwing money away?

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tehlorax said:   Four years seems quick to me too. You sure you aren't throwing money away?
  Perhaps, but the water here (DC area) is very acidic and corrodes plumbing and fixtures. The 30-gallon electric heaters I purchase have a six-year warranty and cost about $275 each. I either install them myself or hire a free-lance plumber to do so for $100 or so.  

RHEEM 30 GALLON SHORT 240 VOLT ELECTRIC WATER HEATER Item # 85-9766 
UNSPSC Code 40101825 
RHEEM 
Part # PROE30 S2 RH93List Price: $298.67
Priced Each
1+ $274.00  

Product Warranty6-YEAR WARRANTY ON TANKS AND PARTS



    •  


Patented R-Tech anode rod and resistored heating elements protect from corrosion. Electric junction box located above the heating elements for easy installation. Meets or exceeds requirements of the National Appliance Energy Conservation Act (NAECA). Brass drain valve and factory installed temperature and pressure relief valve included. The patented Everkleen system fights sediment build up.

  • Tank height: 30
  • Diameter: 22.25

I get a $75 annual discount on my Erie rental-property insurance, per unit, by doing this, and, of course, there are tax deductions too.

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If it corrodes all the plumbing in the house (copper pipes, dishwasher, washer, faucets, dang ...), wouldn't it be cheaper in the long run to have some kind of whole house filter or purifier?

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I've just been replacing the anode rods. Did that a couple years ago and haven't had one go in a while, before that one or two would go every year. Also with a water heater in the kitchen, I would put in a WAGS valve in a drain pan. It's only a matter of time before a water heater leaks. Mine are all in the basement so it doesn't matter if the floor gets wet, but anywhere else should have a pan and a shut off.

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rufflesinc said:   If it corrodes all the plumbing in the house (copper pipes, dishwasher, washer, faucets, dang ...), wouldn't it be cheaper in the long run to have some kind of whole house filter or purifier?
  Some large apartment complexes, especially on the MD side of the Potomac river, have installed devices that neutralize the acidic water, but that was only after learning of the issue through pin-hole water leaks made a real mess of the buildings. We seem to have less of that issue on the VA side, but I am aware of at least three big condo properties that are suffering pin-hole leaks -- mostly because they were built with thinner grade copper pipes than required by code. In the older parts of DC, with lead water supply pipes, there was a terrible issue some years ago with lead leaching into the water from the acidic source water. DC water now treats its water with something that reduces the lead leaching and is replacing the lead pipes it owns. 

I am not sure if there is such a device for residences or if it would be effective, but replacing water-heater anodes is one less expensive way of preventing leaks.

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drew2money said:   It was water heater. It was one of those appliance type in white box, located in kitchen. Started leaking, and initially went into subfloor, wasn't detected until it did a lot of damage.
  

You mean hot water dispenser?

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rufflesinc said:   If it corrodes all the plumbing in the house (copper pipes, dishwasher, washer, faucets, dang ...), wouldn't it be cheaper in the long run to have some kind of whole house filter or purifier?
  

Filter won't change pH.

Switchng to PEX will stop corrosion of the pipes. Fixtures can be easily replaced. 

I know there are people who swear by copper, but I am a firm believer of PEX. Replaced original galvanized pipes in 2 houses with PEX. Easy to work with, you just bend them around the corners. 

Unlike copper, they are also freeze resistant. 

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The water heater was moved to be external, in an external housing unit. It was an old house, and I wanted the space it was taking. I won't have water damage again.

While we are speaking of plumbing problems, be wary of the grey Quest plastic tubing that PEX replaced. That stuff is shit. Not only is it shit, but the connectors, plastic connectors, are as well. I have two houses, bought/owned before I knew of the problems, and I have leaks every couple of years. There was a Class Action law suit, but it has expired. The walls are very thin on the pipe, and some idiot thought plastic connectors was a good idea. NOT

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Some lease renewal questions:
1) What's recommended for the security deposit? Return it (after checking house condition) and get a new deposit? Rollover into renewal? My state requires paying interest if it's held over 2 years.
2) Is it OK to just amend the original lease with the new dates or is it recommended to sign a new one? I'd think a new lease would require a returned deposit.
3) Anything else I should be aware of? No other terms will change.

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mcb247 said:   Some lease renewal questions:
1) What's recommended for the security deposit? Return it (after checking house condition) and get a new deposit? Rollover into renewal? My state requires paying interest if it's held over 2 years.
2) Is it OK to just amend the original lease with the new dates or is it recommended to sign a new one? I'd think a new lease would require a returned deposit.
3) Anything else I should be aware of? No other terms will change.

  1. If your tenants remain the same, I always roll into renewal. Keep in mind that unless you allow a gap of no SD, they will have to cough up another SD while waiting for return.
2. yes just sign a renewal agreement
3. renewal is easy , don't sweat it.

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mcb247 said:   Some lease renewal questions:
1) What's recommended for the security deposit? Return it (after checking house condition) and get a new deposit? Rollover into renewal? My state requires paying interest if it's held over 2 years.
2) Is it OK to just amend the original lease with the new dates or is it recommended to sign a new one? I'd think a new lease would require a returned deposit.
3) Anything else I should be aware of? No other terms will change.

  
Roll over is easier. If rent has increased, ask for the additional deposit to match the new rent. 

Not sure where you are, but in NY State, the deposit has to be in an account separate from your personal/business accounts. We just have it sitting in a savings account that we opened just for the deposits (separate account for each renter). This way, it is easy to show them that they are only earning $0.50/year in interest, which we give them when we return the deposit. For multi-year renters, we just let the interest accrue, and will refund when the deposit is refunded. 

rated:
I never charge a SD that is same as rent, its either lower than or higher than, in set increments.
I always send a new lease for new signatures. State rental statutes / laws do change from time to time so may want to pay attention on renewal leases.
Always roll over deposit.

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My lease goes month to month after term ends. You only need to resign lease if you trying to firm up that they will be there for another period of time, or you are changing it, going up in price, etc.

Your state usually specifies how the security deposit is handle. Just google it.

You don't return security deposit until AFTER they have moved out, and an inspection has been completed. But states vary, I have 30 days to return.

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Jax,
What is the reason you never charge the same amount as rent? I've always made that my go to number with it increasing if the tenant has weaker rental history or credit. Just curious. Thanks

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I was talking to a co-worker who has some rentals. She was saying lately that she has renters leave the place a mess and then don't pay the last months rent. So when you hold back their security deposit, you don't have anything to hold back because of the skipped payment. How do you keep that from happening?

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dmikester10 said:   I was talking to a co-worker who has some rentals. She was saying lately that she has renters leave the place a mess and then don't pay the last months rent. So when you hold back their security deposit, you don't have anything to hold back because of the skipped payment. How do you keep that from happening?
options:
> only have rentals in landlord-friendly places where you can evict quickly, thus minimizing the hit.
> get first and last month's rent up-front when signing the lease.
> don't be a landlord.

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dmikester10 said:   I was talking to a co-worker who has some rentals. She was saying lately that she has renters leave the place a mess and then don't pay the last months rent. So when you hold back their security deposit, you don't have anything to hold back because of the skipped payment. How do you keep that from happening?
Do regular inspections, if you find significant damage, bill on the spot.

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dmikester10 said:   I was talking to a co-worker who has some rentals. She was saying lately that she has renters leave the place a mess and then don't pay the last months rent. So when you hold back their security deposit, you don't have anything to hold back because of the skipped payment. How do you keep that from happening?
  Ensure that your lease does not allow for the last month's rent to come from the deposit.  After all, that's why it's called a security deposit. If your location allows it, collect the first and last month's rent in advance, and as large a security deposit as possible. It may be prudent ti hire a property manager if this sort of thing happens often and/or get better tenants from the beginning.

rated:
rufflesinc said:   
dmikester10 said:   I was talking to a co-worker who has some rentals. She was saying lately that she has renters leave the place a mess and then don't pay the last months rent. So when you hold back their security deposit, you don't have anything to hold back because of the skipped payment. How do you keep that from happening?
Do regular inspections, if you find significant damage, bill on the spot.

  Do you actually do that?

rated:
tehlorax said:   
rufflesinc said:   
dmikester10 said:   I was talking to a co-worker who has some rentals. She was saying lately that she has renters leave the place a mess and then don't pay the last months rent. So when you hold back their security deposit, you don't have anything to hold back because of the skipped payment. How do you keep that from happening?
Do regular inspections, if you find significant damage, bill on the spot.

  Do you actually do that?

Yes, twice a year, mainly to replace furnace filter and washer lint filter. I also do inspection before a renewal. If you are in a cold climate, i highly suggest this.

rated:
I actually pad the normal security deposit by a couple hundred. If the house is $900, I collect $1200 for SD, that way I have money to cover some of the cleaning.

Why would your co-worker allow them to just stay after X number of days without paying? Take them to court....

rated:
dpa789kd said:   Jax,
What is the reason you never charge the same amount as rent? I've always made that my go to number with it increasing if the tenant has weaker rental history or credit. Just curious. Thanks

  Answer has really been in last few posts, but primarily to help ensure people dont think it is last months rent, even though it states that in lease. I also don't have to concern myself with collecting more due to slight increase in rent, as more hassle than worth.  If its less than rent, very good credit, jobs...less risk and cant claim as last month as it doesn't match rent.   If higher than rent, i have excess even if they do not send in last month. Even the threat of eviction, with a 3 day notice, will motivate some people to cough it up.

rated:
drew2money said:   I actually pad the normal security deposit by a couple hundred. If the house is $900, I collect $1200 for SD, that way I have money to cover some of the cleaning.

Why would your co-worker allow them to just stay after X number of days without paying? Take them to court....

  I agree, though ive found that in that price range, tenants are more sensitive to total move in costs. You may also be competing with apartments as an option... they may have move in specials.... Not that your property is competing, but the tenants may be more apartment friendly based on their history or needs. All depends on property and location. In my immediate area $900 is an apartment, condo, townhome.

rated:
rufflesinc said:   
tehlorax said:   
rufflesinc said:   
dmikester10 said:   I was talking to a co-worker who has some rentals. She was saying lately that she has renters leave the place a mess and then don't pay the last months rent. So when you hold back their security deposit, you don't have anything to hold back because of the skipped payment. How do you keep that from happening?
Do regular inspections, if you find significant damage, bill on the spot.

  Do you actually do that?

Yes, twice a year, mainly to replace furnace filter and washer lint filter. I also do inspection before a renewal. If you are in a cold climate, i highly suggest this.

i suspect the OP was referring to the "bill on the spot" component of your suggestion.

also, i don't really see how your suggestion applies to this case. the tenant couldnt/wouldnt pay and moved out, likely within a couple weeks (<month)...your biannual inspections would not have helped unless a) it fell in those few weeks, and b) the tenant was magically compelled to and able to give you money for damages when they couldnt even make rent.

leaving the place a mess doesnt always necessitate having lived in a mess.

rated:
solarUS said:   
rufflesinc said:   
tehlorax said:   
rufflesinc said:   
dmikester10 said:   I was talking to a co-worker who has some rentals. She was saying lately that she has renters leave the place a mess and then don't pay the last months rent. So when you hold back their security deposit, you don't have anything to hold back because of the skipped payment. How do you keep that from happening?
Do regular inspections, if you find significant damage, bill on the spot.

  Do you actually do that?

Yes, twice a year, mainly to replace furnace filter and washer lint filter. I also do inspection before a renewal. If you are in a cold climate, i highly suggest this.

i suspect the OP was referring to the "bill on the spot" component of your suggestion.

also, i don't really see how your suggestion applies to this case. the tenant couldnt/wouldnt pay and moved out, likely within a couple weeks (<month)...your biannual inspections would not have helped unless a) it fell in those few weeks, and b) the tenant was magically compelled to and able to give you money for damages when they couldnt even make rent.

leaving the place a mess doesnt always necessitate having lived in a mess.

  So what would YOU do if you were in the house and you saw significant damage that was obviously due to abuse on the part of the tenant? i have not had to encounter this but i would simply bill them for the damages.

I was assuming the tenant paid every month except the last one. That tells me they weren't broke, just being jerks. So they would have cash on hand.

I said I inspect twice a year as an example. If OP was so concerned, OP could do it monthly and put it in the lease.

rated:
Hey guys I finally am starting to slow down with my REI and may actually have time to post more on here and provide some of my experience. Might even help some of you guys avoid stupid crap I've done.

Since around this time last year I have purchased around 30 properties and rehabbed all but 3 of them which are currently being rehabbed. Ive signed roughly 35 leases in that time frame too and gone from small time make hobby money with my real estate to full on buying super cars with the rent checks money.

Ive put together a site that has a couple informative pages for you guys to check out. Im not sure if the mods are cool with posting it so ill just leave it here and if you guys want it then cool if not then mods, ill take it down. Im not selling anything on it, hell I don't even have ads, just trying to give back to the fatwallet finance community because years ago when I got started this was a main forum that gave me the courage to get after it.

OhioPremiumproperties.com

Ive got pictures of the a lot of the properties I bought and even a few walkthroughs on various topics. Its a bit clunky (im a landlord not a web designer) but real estate 101 is the area for you guys to check out.

rated:
dmikester10 said:   I was talking to a co-worker who has some rentals. She was saying lately that she has renters leave the place a mess and then don't pay the last months rent. So when you hold back their security deposit, you don't have anything to hold back because of the skipped payment. How do you keep that from happening?
  Becareful... you need to check your local laws. For example, in Massachusetts, the most I can accept is First, last and security deposit.  the security deposit can not be more than one month's rent. So , if the rent was $1K, then i can only collect $3k at most. Also, the security dollars has to be in a separate bank account collecting interest for the tenant.  You can get around this by paying a default 5% at the end of the year term (why would you give 5% vs .01% most banks are paying right now).  Also, as some have stated here that they just rollover the interest until the tenant leaves....not in the liberal state of Massachusetts you dont.  It is a requirement that you give it back to them every year.  As for how I get around it?  Collect First, Last and security (all three).

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