We are new landlords as of almost 18 months now. We have little 3 bedroom 2 bath bungalow in heart of growing town, extremely walkable to major grocery stores, doctors offices, sport bars, and coffee shops. It was our first home and so we have sentimental value about it.

We placed rent at 2200 which our real estate agent said was on the high side, yet the first person who looked at it loved it and signed a one year-s lease.

Now he is complaining. He has spoken with our neighbor who has a 3bedroom 1 bathroom house but also a 2 car garage (we don't have a garage). They pay "significantly less rent" and also have lawn care provided.

He is asking for us to paint the house (it is a nice tan/khaki color with dark blue shutters and dark blue door with matching light blue roof), not because the paint is wearing off but because he wants another color.

He is also asking for lawn care. I am looking into irrigation systems but the amount of lawn, minus the size of the house, is about 8-9K sq ft! Plus I read about the maintenance of the sprinkler heads and how much of a pain it is. We live 7 hrs away by driving now.

Our house is more or less updated except for the kitchen which needs a total remodel. I'd like to save up our money for that. He is not asking for a kitchen remodel but in the event he leaves that would be good.

We are one of the smallest houses and cheapest ones on the street, with some houses totalling 2.5X the price of ours. They are new construction.

The rent we charge covers mortgage (taxes, insurance, etc), home owners warranty, termite bond, and flood insurance leaving us a measly $32 of profit a month (IF we don't have to pay for a service fee, or pay for HVAC tune up and then we are in the red that month).

I don't know what to do. Is he out of line? Am I not giving enough as a landlord? What do I prioritize? Kitchen remodel, lawn care and maintenance, or exterior house painting? None?

We do not trust him as he's lied to us several times before, we don't want to make a decision based on him. We want to assume he may leave next summer and we will need to put the house on the market.

- Your first mistake is being 7 hours away.

- Your tenant has tenant's remorse. He might stay for the duration of the lease, but will probably leave when the lease is up. Also, his neighbor may not be telling him the whole truth.

- Tenant is not out of line, just upset for signing the lease. No amount of upgrades will make him feel happy.

- Tell him that you will not repaint the exterior, if the paint is fine.

- Next time he complains about the rent being this high, tell him that the current rent doesn't cover the total house payments and expenses. Make him feel guilty.

- Point out the positives in the house, talk to him about the great location, the neighborhood.

- Save your capital, you will need it then. At that time you will realize how expensive land lording can be.

- RE rentals are long term investments, and rarely turn positive cash flow from day one. On some of my early properties, it took me 10-12 years to break even.

Market is peaking. Next few years will likely be flat or declining. You live too far away. Whatever you paid, you don't have enough cashflow. One month with no payment will kill 2 + years profits.

Yes I agree being 7 hrs away is terrible. We moved for job relocation and as I said, the house is very sentimental to me plus we plan to move back one day so ideally we want to hold onto it as much as we can, whether logical or not.

Here's one idea. Hire a gardener to cut the lawn once a week and test the sprinkler system every two weeks to make sure the head are working well.

Explain to your tenant that you should only have grass and automatic sprinklers in limited areas because they will have to pay the cost of the water, not you. You will gladly till the lawn, have sprinklers installed and plant seeds -- during the right time of year that the seeds will take.

Since the house doesn't need painting and he only signed a one year lease, you can't afford to spend money on unnecessary things, your saving up for the problems that come with ownership.

When I purchased my first 5 homes, I only made around $30 a month in profit per house. The cost of repairs and maintenance cost more, but in those days depreciation was over a 15 year period, now it's 29.5 years. I had tax savings that evened everything out. Now those 5 homes make me $2,000 each a month profit after all expenses. This is over a 35 year period.

The first issue is the house is" Very Sentimental" to you. The house is now a business and sentimental will cloud your business choices you make on the house.

The Second issue is the house is 7 hours away. Do a 1031 exchange and buy a property near you.

If you did all your screen on this tenant then it should not be an issue of the tenant affording the property.

Painting the house: Tenant can buy the house and paint it whatever color they want at this point the house will not be painted. The Lawn service and sprinkler concern, the tenant signed the lease with the responsibility that they will cut the lawn and maintain it per their lease if they want the lawn cut and sprinklers it will be a rent increase of X amount.

Kitchen remodel? Will this be an issue when you place the house on the market?

House paint? Is the paint fading due to Florida sun? IS the paint peeling? Will this be an issue when you place the house non the market?

Most likely the answer is no. When you decide to place the house on the market have a pre-inspection done of the house and this will help you determine what needs done to the house that a buyer may have a concern with it.

Painting would cost us $2500-3000

Irrigation system will cost thousands too, there is not one currently in place

House is in optimal location, is not the house but the location that is incredible. Equity has risen 85k in just 2.5 yrs for a 315k house. We could sell now and make a profit but don’t want to let this go.

Yes tenant signed lease with dried up lawn and was very proud of the place, writing my real estate agent why e wanted the house so bad etc, until we think he lost his job and had to be late on rent 2x. Now he has resigned another years lease but only after complaining about being “embarrassed” about the way the house looked.

Thanks for he advise, I think I am letting him push me around some.

PS kitchen remodel may be necessary as home is from 1949 and kitchen appears to be original to it, we are in family area blocks away from

Elementary school and any woman would want new kitchen.

I’ll look into a 1031 exchange, but not ready to sell the house yet.

One Rental, $ 2.200 a Month.

Leaving a Measly profit of $ 32.00 per Month.

First and last answer-- which you haven't learned yet- but your getting close

NO NO and NO.

Learn how to say no. You don't negotiate prices for your neighbors dump. When the lease is expired you'll have a chance to renew or terminate that's when you can change your options.

You’re right NE, will work on it! That’s 100% correct :-/

Ok MYOB, thank you! Yes you’re right

Sara,

All of my houses are rented at above market rent. If a tenant wants to know why my house costs more to rent, I tell them 'you get what you pay for'. If you want to save $200.00/month, then go the rent cock-roach infested dump next door. That usually shuts them up.

Thanks all

We did a check on Zillow for other comparable rentals in the same zip code and found only one other home cheaper by $50/month. We do feel that our house was at normal value. We do maintenance issues quickly and keep the house in the best condition.

We do need a local person to check on the house, our real estate agent said she’s be happy to but maybe we need someone to do for hourly pay

Never rent out a property that has sentimental value. Tenants don't care, you will make the wrong decisions and be very disappointed in the end. Get rid of the emotion and take things as they come.

Managing a house that is 7 hours away is a lot of work and cost, you will have to hire people for things that you could easily do yourself or at least check yourself and be there to watch the repairs.

If you lived in house for 2 of the last 5 years you will have no tax consequences for that sale. A very important issue. Even if you plan to move back, what can you do with that money in the mean time? How much money will you lose holding on the house. (You say you want to keep it, but will probably put it on the market next summer?) Are you better offering the tenant a way out of the lease and selling now? Sometimes just offering that "happy clause" or an early lease termination fee is enough to quiet a tenant.

As you talk of a small profit, are you considering the deduction of depreciation in that calculation? That will save you some on your taxes at the end of the year. But will give you tax implications if you sell years from now because you did not move back.

As to your tenant... "NO NO NO" is good advice. Sorry, this is the way it is, he chose it. Not relevant that the costs are different elsewhere. Make upgrade decisions on things that will benefit you. Repair what is broken.

Yes Linda I need to get over the fact that I love that house, neighborhood, and my memories there and begin to see it as just my rental property. All of the responses here including yours are helping me with that.

Being 7 hrs away sucks. I’m trying to build a good base of Technicians I trust from when I used to live there.

Unfortunately we lived there for less than two years before moving.

No I am not taking into account the deduction of depreciation when I say my profit is $32 a month. I need to look back in my taxes to see what that saved me last time

Hi Sara...

I won't say it again since so many others have already and you seem to be taking their advice, but this is just a house. Oops, I said it. ;-)

I've never rented out a house that I've lived in. Not sure I could stand it if a tenant trashed my home. All of my houses belong to ME, but they were never my HOME. I think that's the difference here. So you're in a difficult spot I've never been in.

Dave Ramsey, my financial mentor, has talked to probably 1000 callers over the past 10 years I've been listening to his radio show who are in your same dilemma. His advice is always, SELL THE HOUSE. Long distance land lording rarely works out for the best. There are uncounted hassles, costs, sleepless nights, etc.

Imagine if you saw this tenant's Facebook page and he was having a kegger in your living room, or posted a picture of the new pink stripes he painted in your kitchen. Your therapy bills (or wine budget...sometimes those are one and the same) alone would eat up 2 years of profits! ;-)

As Dave says, "there's a house on a every corner." Unless you have concrete plans to move back within the next 12-24 months, just sell it and be done. You'll find a house you love even more when it's time to come back.

To some of your questions:

1) Is the rent out of line? No. You guys agreed on it. At one point, he was satisfied. Now he's grumpy. Not your issue.

2) Paint? No. The paint has not changed since he moved in, and he was satisfied with it at move in.

3) Lawn care? No. He was satisfied with providing his lawn care at move in, and the lawn has not changed.

Are you seeing a theme here? When he moved in, he was SATISFIED with everything. You don't get a do-over just because your neighbors are talkie.... The deal is the deal. The lease is the lease. Period. End of story. If Mr. Tenant isn't happy, offer him an Early Lease Termination (ELT) fee. Make it equal to 2 month's rent, plus he has to provide 30 days written notice. The fee must be paid up front. No, the deposit cannot be applied to the fee or any rent due during the last 30 days. Security deposit will be refunded less damages after he moves out and returns possession.

Otherwise, he can stay and be CONTENT.

His choice must be one of those two: use the ELT or stay and be content.

Good luck!

What kind of lawn is this? If it's bahiagrass I wouldn't bother installing a sprinkler system. If it's St. Augustine you run the risk of it not regrowing on it's own if there's a severe drought or possibly if tenant leaves large objects on the grass over time like a portable swimming pool.

I suggest take this tenant's demands out of the equation and think about lawn watering problem on it's own. If it actually is a problem.

By now you should know what you need to do.

And if we are at the top of the market, now is a good time to sell.

Explain to tenant that you are still losing a little on the house each month.

32.00 is not enough reserve each month to cover maintenance cost.

Tell the tenant you will allow him out of the lease early.

This will also shut him up.

He may be just bs negotiation to try and get the rent down. If you know he can afford it and is just bs ing to haggle, then offer him an early lease termination because he is "so unhappy". Tell him that for x amount of dollars he can leave now and that you have someone who would like the house so let you know when he will be out. I am pretty sure he will stay and pay and shut up. Find a landscaper and hire out the lawn care. That is something you should have done in the first place. I think he will fall in line after that. You have a second bath and the cheaper place does not. Point that out to him. Don't repaint. He is just feeling underserved so give him the out with the lease termination fee. Make it a thousand dollars. With the hurricane now, probably an insurance company would re rent it right away from you.

Yes we did think he was trying to negotiate a cheaper price because he brought all this up a couple of months before he was due to sign new lease. He signed anyways after his due notice had passed. So he’s completing his second year now and will be up June 30 2019. I am really not expecting him to stay.

What we haven’t discussed it how much is curb appeal worth? We are on large corner lot one block away from busy road and foot traffic and most houses around us have beautiful landscaping. Most people have said let the tenant do lawn care, but if I have lawn care and make it nice will it attract higher rent or more renters? Renters rarely take care of the lawn but do they want a nice one or don’t care?

Are you near Orlando? The Landlording Bootcamp is Nov 9-10 in Orlando. Invest one weekend and you'll walk away with the skills to handle this tenant.

"A large lawn that has to be cut by the tenant will drive tenants away."

I'd agree with the advice to sell - get that kitchen redone, and get it on the market as soon as practical. BUT - I advise that only because you live too far way.

We live a mile from our first home, which we rent out. I happily let go of the sentimental ties (I liked our new home better), but my hubby took a lot longer. Let me tell you, when a tenant family made a mess of the place, it was a lot harder on him than on me, because I did not take it personally. He STILL won't talk about that experience!

Condition of the lawn: Grass? No Grass? Now the tenant is responsible IF YOU install a sprinkler system. The extra costs to improve your lawn is now wasted IF tenant does not water the lawn.

Whats the extra cost to improve the lawn and install the sprinkler system plus you are 7 hours away to check the property on a daily basis.

Linda J of NY, made an excellent point that if you lived in the house for 2 years of the last 5 years you will have no tax consequences.

7 hours away is a two day trip to the house plus 1/2 day to a day at the house.

Plus if the tenant damages the house you will have a real problem with it. Again its a business not sentimental issue.

Condition of the lawn: Grass? No Grass? Now the tenant is responsible IF YOU install a sprinkler system. The extra costs to improve your lawn is now wasted IF tenant does not water the lawn.

Whats the extra cost to improve the lawn and install the sprinkler system plus you are 7 hours away to check the property on a daily basis.

Linda J of NY, made an excellent point that if you lived in the house for 2 years of the last 5 years you will have no tax consequences.

7 hours away is a two day trip to the house plus 1/2 day to a day at the house.

Plus if the tenant damages the house you will have a real problem with it. Again its a business not sentimental issue.

Sara, my response is dif from the others above. I also had to rent out our house in FL when we were stationed to a dif military base. I was very picky with tenants and had a lot of rules to keep the place in "as-is" cond so I could move back in the future. (do NOT paint the wood cabs in the kit, be careful of my frosted glass shower doors with the cut crystal swans on them, etc.) I also loved the location as well as the structure! Well, 30 yrs later, we never moved back to FL, and the house been a rental all that time. 10 years ago I made it back there, and it wasn't the home I remembered. It seemed so small, and sort of dumpy, and the neighborhood had changed. The cabs were painted, the glass doors long gone, the avocado tree cut down,roses gone etc. Even though over the years we painted inside and out,and had a new roof and AC installed, it was no longer a house I would live in. I lived in MUCH nicer places, and when/if I go back to FL I will want a way better house with pool,etc.