Source: rentredi
Tenancy disputes are an inevitable part of managing properties. Roommates are certain to fall out, and damage to your property means you’ll need to take legal action.
However, as a landlord, it’s your job to retain a professional, kind approach throughout. The space you lease may be your property, but it is home to your renters. This means you must take steps to de-escalate emotionally fraught conversations and focus on mediating conflict when it arises.
You’ll also want to ensure that your paperwork and documentation properly protect you. This is key if you’re concerned about late payments or find that tenants are abusing the terms of your lease agreement. Setting clear expectations in your initial paperwork ensures that everyone understands their responsibilities before handing over the keys.
Communication
Clear, regular communication is the key to a happy tenant-landlord relationship. Getting in touch with your tenants before you schedule maintenance work or are planning to visit the property can help you proactively avoid disputes and disagreements. Maintaining a polite, professional tone throughout shows that you care about looking after the property and take your responsibilities as a landlord seriously.
If conflict does arise, you must be clear about everyone’s responsibilities. This is key, as some landlords can fall foul of the politeness paradox. Sometimes, striving to be “too nice” can undermine your efforts to be assertive and may mean that your boundaries are crossed and your generosity is taken advantage of. While you should never take a rude or aggressive tone with tenants, it’s important to know when tenants have crossed a line and require polite but firm communication.
Taking an assertive, professional approach is particularly important if you feel that tenants are crossing boundaries. This can put you in an awkward position and lead to friction if left unresolved. Rather than falling into the politeness paradox, assert your boundaries and maintain a professional relationship with tenants by practicing the art of saying “no” and gracefully leaving conversations that have become unnecessarily heated.
Mediation Techniques
Tenants who raise disputes are usually in an elevated emotional state when they report their aggrievement. This is entirely understandable, as tenant disputes usually arise when something is wrong with the home they are living in. Rather than escalating conflict during a dispute, use emotional intelligence (EI) strategies to calm everyone down. Effective examples of EI include:
- Self-Regulation: Utilize mindfulness and relaxation techniques to reduce your cognitive stress and improve your impulse response in the heat of the moment.
- Empathy: Actively listening to your tenants helps you understand the root cause of their conflict. This can help you avoid hasty judgments and ensure you maintain your reputation as a good landlord.
- Recognize Your Feelings: Take the time to name your feelings to navigate conflict with more grace. Recognize when anger or frustration is getting in the way of good decision-making.
It’s also worth noting that some conflicts have nothing to do with your responsibilities as a landlord. Sometimes, roommates fall out or relationships break down. When this occurs, you may need to take mediating measures to ensure that rent is paid on time while folks are given time to sort out their new living situation. If this does occur, you’ll want to have a clear understanding of the next steps already outlined in your documentation.
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Proper Documentation
Clear, legally binding documentation is crucial during a conflict. If you haven’t covered an issue in your lease agreement, it’s much harder to find a productive path forward with upset tenants. At a minimum, you should have paperwork that covers common landlord-tenant disputes like:
- Housing discrimination;
- Termination of tenancy;
- Eviction proceedings;
- Unlawful detainers;
- Rent abatements;
- Maintenance responsibilities.
Unless you happen to work in housing law, you probably can’t assemble this document yourself. As such, you should seriously consider working with a legal professional who specializes in lease agreements and rental law. Having a specialist on hand can help you move forward in a professional, polite manner, too. You don’t have to worry about arguing your case when you know the law is on your side, and you shouldn’t worry about wrongfully evicting tenants if you’ve squared things away with proper legal guidance.
Conclusion
Conflict and tenant disputes can be an almost inevitable part of renting a property. Eventually, you and/or your tenants will raise disputes that can be emotionally straining. Rather than getting drawn into heated arguments, put forward a clear, professional persona by working closely with trusted legal advisors who understand rental law. This will also ensure that all your paperwork is in order, which can act as a deterrent to tenants who might otherwise overlook their responsibilities.
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By Sarah Sher
Figuring out a rent-to-income ratio can be complex. Tenants want to ensure their rent doesn’t take most of their paycheck, while landlords need to consider their rent-to-income ratio to determine if potential tenants can afford to live in the rental property.
In this guide, we break down what the rent-to-income ratio means for both sides, offering clear, straightforward tips on how to wield this powerful tool. Keep reading to see how getting this ratio right benefits everyone involved and makes the rental world just a bit easier to navigate.
What Is a Rent-to-Income Ratio?
A rent-to-income ratio is how much of a person’s gross monthly income should go toward rental costs. The general rule of thumb is to keep it at or below 30%, which allows tenants to cover rent and other expenses they’re responsible for.
While the 30% mark is a solid aim, landlords aren’t required to stick to this percentage. There may be times when the rent-to-income ratio for tenants can be 30% to 45% — especially now that rent prices are higher than they were a few years ago. In this case, looking at a person’s complete financial profile is essential to identify if this ratio may be too much for them.
For tenants, it’s okay if the rent-to-income is slightly above 30%, so long as they can afford to cover other rental expenses, like utilities, and can comfortably afford their desired lifestyle.
How Do You Calculate Your Rent-to-Income Ratio?
To calculate a rent-to-income ratio, divide the annual gross salary by 12 to get the monthly income. Then, multiply that number by 30% to get a general ballpark on how much rent a person can afford.
Another option would be to outline all current monthly expenses. Dedicate 30% of one month’s portion to cover the rental payment. For example, if a person earns $60,000 yearly (before taxes), their monthly budget is $5,000 — placing the ideal rent at around $1,500.
Remember, factors like side hustles or unexpected expenses can tweak these numbers a bit.
Why Is a Rent-to-Income Ratio Important to Calculate?
Calculating a rent-to-income ratio opens the door to smarter financial choices that balance both living expenses and savings goals. A rent-to-income ratio helps to gauge whether a rental is within a person’s financial means, preventing budget strain and guaranteeing their ability to comfortably cover other life costs. Having this ratio also encourages a balanced approach to spending, which safeguards against financial overreach.
For landlords, the rent-to-income ratio is a tool for screening prospective tenants, highlighting those with a solid financial foundation who are less likely to miss rent payments. This ratio can play a pivotal role in setting competitive and fair rental prices by helping to determine income ranges prospective tenants should make to qualify.
Having a handle on rent-to-income ratio lays the foundation for a solid partnership between tenants and landlords, guaranteeing everyone can focus on their financial well-being.
How Much Should Tenants Spend on Rent?
When deciding how much to allocate toward monthly rent payments, tenants often juggle multiple financial considerations. The “30% rule” serves as a starting point for many. However, life isn’t one-size-fits-all — and neither are budgeting strategies.
Another guideline, the 50/30/20 rule, offers a broader framework. In this practice, 50% of the monthly income covers needs (including rent), 30% goes to wants, and 20% is tucked away into savings.
So, if we use the same gross annual income analogy from earlier ($60,000 yearly), $2,500 per month would be set aside to cover needs (50%), which includes rent. This leaves $1,500 for wants and $1,000 for savings each month. When looking to balance everyday enjoyment with saving for the future, especially when rent prices inch upward due to inflation, the 50/30/20 rule is beneficial.
Regardless of which “rule” a person follows, consider the full picture of rental costs. This includes the rent and other expenses, like parking, pet rent, and potential security deposits. Some landlords might even set a minimum monthly income requirement, which could steer a potential tenant’s apartment hunt.
Get creative in the search process for a dream rental that also fits within a defined budget. One method of doing this is to broaden the search parameters by looking for apartments that bundle utilities with rent. Or explore areas slightly outside the initial target location. Some online apartment search platforms also provide filtering options to match varying financial needs.
Finding the right place to call home involves balancing these rent rules with a personal financial plan, including savings and debt repayment. When considering these elements, craft a budget that supports a comfortable and financially sound living situation.
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Why Should Landlords Care About Rent-to-Income Ratio?
Focusing on the rent-to-income ratio is a key strategy for landlords who aim to create a positive rental community. Here’s a closer look at how paying attention to this essential metric benefits property owners.
Attracting the Ideal Tenants
Adjusting rental prices based on a well-considered rent-to-income ratio draws tenants who are more than just interested in the property — they’re financially comfortable with the rent. This match leads to longer stays, minimizing turnover and the challenges of empty units.
Setting Rent Thoughtfully
Applying the rent-to-income ratio guideline to rental pricing helps keep rates attractive to potential tenants while keeping the landlord’s financial health in mind.
Improving Tenant Screening
Incorporating the rent-to-income ratio into the screening process gives a clearer picture of a prospective tenant’s financial situation, informing decisions on security deposits and move-in fees. This careful approach helps secure the investment and lays the foundation for trust immediately.
Turning to the rent-to-income ratio is more than a numbers game — it reflects a commitment to both the financial health of the investment and the tenants’ contentment. Consider the impact this could have on making a property management approach more effective while presenting the landlord as a collaborative part of the community.
What Are Some Other Metrics to Use With the Rent-to-Income Ratio?
Renting involves more than a keen eye — it’s about understanding all the numbers that shape decisions. Here’s how researching these figures can benefit tenants and landlords:
For Tenants:
- Debt-to-Income (DTI) Ratio: Imagine balancing rent, student loans, and perhaps a car payment, all while keeping a social life alive. The DTI shows tenants what portion of their paycheck is already spoken for by these commitments. Aiming for a lower DTI isn’t just smart; it’s about making room for life’s little extras, like an impromptu concert or a weekend getaway.
For Landlords:
- Operating Expense Ratio (OER): Picture the property not merely breaking even but actively contributing to financial goals. The OER highlights the chunk of income consumed by property expenses. With it, landlords can make sure that the investment pays dividends, fueling future goals.
- Cash Flow Analysis: Check whether the property is pulling its weight. Is there a financial cushion at month’s end, or is it time for a strategy shift? Positive cash flow is more than just reassuring; it signals that the property is more than just bricks and soil but a crucial asset in a financial landscape.
Blending these insights with the rent-to-income ratio provides a compass for finding financial health and investment triumph. For tenants, it’s about crafting an enjoyable and sustainable lifestyle. And for landlords, it’s about turning properties into prosperous ventures.
What Is the Future of the Rent-to-Income Ratio?
The rent-to-income ratio is poised to adapt as housing markets and the economy shift. It traditionally reacts to the pulse of the economic cycle. Being aware of these potential shifts is crucial to making savvy decisions that align with personal and financial goals.
Platforms like Avail are at the forefront of these changes. For prospective tenants, Avail offers a way to streamline the application process, helping save on fees by efficiently creating profiles. And for landlords and property managers, it simplifies finding the right tenants through comprehensive screening tools that check income and credit reports with ease. This level of detail strikes a balance between tenant financial capabilities and property offerings.
Next Steps With Avail
Whether it’s about a potential tenant determining how much they can comfortably spend on housing or a landlord aiming to maximize their rental income, the rent-to-income ratio is an essential metric to understand.
Avail simplifies this process from both angles. Prospective tenants can use the educational resources Avail provides to find their ideal personal rent range. And landlords can access robust rental pricing tools, analytics to optimize revenue, and tenant screening services.
Take the first step toward making more informed rental decisions today. Create a free Avail landlord account or tenant profile to join a community committed to responsible rental practices.
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Source: NewsNation
A New York woman is set to be paid $165,000 in damages plus $585,000 for her apartment after the building attempted to evict her because of her three emotional support parrots.
Meril Lesser moved into the Rutherford, a 175-unit cooperative apartment building, in 1999. She lived there with the birds, which the Department of Justice said were to assist with her disabilities, without incident until March 2015. That’s when one of her neighbors started to complain about the alleged noise coming from Lesser’s apartment.
Over the course of a year, the New York City Department of Environmental Protection visited the building and Lesser’s apartment 15 times to conduct inspections. The DEP issues zero violations in any of those instances, with one inspector writing “no birds, no screeching — no noise,” on Feb. 7, 2016, The New York Post reported.
Rutherford did not conduct any evaluation over the noise themselves, and did not hire anyone with experience in soundproofing to address the neighbor’s complaints either, the DOJ said.
In March 2016, Lesser asked Rutherford to let her keep the parrots and gave them a letter from her psychiatrist. Despite this, the DOJ said, the apartment building began eviction proceedings against her in May 2016, causing Lesser “severe emotional harm.” Lesser left the apartment in July of that year, but Rutherford continued to maintain the eviction proceeding “well into 2024,” the Justice Department said.
Lesser filed a complaint with the United States Department of Housing and Urban Development in May 2018, saying the eviction proceeding interfered with her fair housing rights. Under federal law, reasonable accommodations in “rules, policies, practices, and services” must be provided to afford equal housing opportunities to those with disabilities. The Federal Housing Administration allows people with disabilities to use a wide array of animals as support pets, as long as they do not pose a direct threat to others’ safety or health, and don’t damage the property.
Once HUD completed its investigation of Lesser’s case, it stated there was probable cause to believe that Rutherford violated the FHA. Given the choice to settle or go to court, Rutherford chose the letter, so the Justice Department filed suit.
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The DOJ and Lesser prevailed in court, and now, because of a consent decree approved by U.S. District Judge Jennifer H. Rearden, Rutherford was ordered to pay Lesser $165,000 in damages and $585,000 to buy her shares. Rutherford also needs to dismiss the eviction proceeding against Lesser, per the decree, as well as “adopt a reasonable accommodation policy for assistance animals.”
This is the tenth such case brought in recent years by the Southern District of New York. According to U.S. Attorney Damian Williams, it’s also the “largest recovery the Department of Justice has ever obtained for a person with disabilities whose housing provider denied them their right to have an assistance animal.”
“This outcome should prompt all housing providers to consider carefully whether their policies and procedures comply with federal law,” Williams said in a statement. “We greatly appreciate our partners at HUD who provided invaluable assistance in the investigation and resolution of this matter.”
Peter Livingston, an attorney for the Rutherford co-op board, said his client was pleased to resolve the case, the Associated Press reported.
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