Fair Wear and Tear vs. Property Damage

It might seem like we’re mincing words, but the difference between “fair wear and tear” and “damage” can actually have a big impact on your pocketbook — as well as the state of your rental property.

Which will it be in your case? Read on to understand the difference.

What is fair wear and tear?Capture

Properties depreciate — plain and simple. And when someone lives in a property, it’s expected that the home will decline slightly due to use.

The carpets will get worn down, the paint will fade, and grout will get dirty with foot traffic. This is called wear and tear, or sometimes reasonable wear and tear or normal wear and tear, depending on your state.

Regardless of what term you use, you can’t expect your tenants to foot the bill for fixing it. It’s a largely expected result of someone living in the home, and outside of following basic standards of cleanliness, there’s nothing tenants can really do to prevent it or stop it from happening.

Examples of reasonable wear and tear

  • Faded paint or peeling wallpaper
  • Slightly faded or dirty carpet
  • Scuffs on wood flooring or small cracks in tile
  • Dirty grout or caulking
  • Small nail holes or scrapes on the wall
  • Sticky doors and windows
  • Faded metal fixtures, shower rods, etc.
  • Worn enamel on toilets, sinks, and tubs
  • Loose door handles

Who pays for wear and tear?

The landlord is responsible for covering the costs of any wear and tear on the property. And in cases of longer-term tenants, landlords may actually need to pay for more wear and tear than usual.

What is property damage?

Unlike wear and tear, property damage isn’t an expected outcome of renting a space to tenants. It’s above and beyond general depreciation of a property, and it’s often the result of poor maintenance or cleaning habits, neglect, or physical abuse of the home. Pets and children often cause property damage unintentionally.

Examples of property damage

  • Stained or burned carpet (something steam cleaning can’t get rid of)
  • Holes in carpeting or large swathes of missing wallpaper
  • Broken windows, mirrors, or fixtures
  • Holes in walls or doors
  • Clogged pipes and drains due to lack of cleaning
  • Doors or cabinets off their hinges
  • Missing tiles
  • Broken appliances
  • Broken blinds
  • Pest infestations
  • Damage done by pets (urine smells and stains, scratched doors/walls, etc.)

Who pays for property damage?

Tenants are responsible for covering the costs of property damage that occurs during their tenure. You as the landlord can take the money out of their security deposit or, if the damage goes beyond the amount of the deposit, send them a bill for the added cost. (Hopefully, it doesn’t get to this point, though, or you may find yourself in small claims court trying to recoup those funds.)

  • The state of the property/damaged item before it was damaged. How old was it? How clean was it? How much life did it still have in it? If the tenant damaged carpet that had already been in the home for 15 years, you can’t very well justify charging them for brand new, premium-grade replacement carpet.
  • How long the tenant was in the home. A little damage after 10 years in the home isn’t the same as it is for a tenant who’s been there for only 18 months. The home is obviously going to look different if a tenant has been in there for the long haul — and that’s to be expected.

You should only charge the tenant to replace what life the item had left in it. Let’s say, for example, the tenant cracked a shower door. The door was brand new when they moved in, and they’ve lived there 10 years. According to the National Association of Home Builders, shower doors should only last about 20 years max. By these standards, you would only charge the tenant for about half the price of a new door, since half its lifespan has already passed.

The importance of a move-in inspection

Tenants aren’t going to just freely admit they broke something and then cough up hundreds of dollars to pay for it. In order to prove there was damage done to the property (and justify dipping into that security deposit), you’ll need detailed inspections on both ends of the lease term.

Before the tenant moves in, use this move-in checklist and go through the property room by room. Take photos of each space and note any signs of wear and tear or damage that already exist. Ask the tenant to do the same upon move-in, and have them fill out this template with all of their notes and findings. They should return it to you within a few days of moving into the property.

How to prevent undue wear, tear, and damage

As with anything, prevention is the best policy here. And while you’re not the one living in the home, there are some things you can do to keep undue property damage at bay.

For one, stay visible. Keep in touch with your tenants and make sure they know to alert you if anything goes awry in the home — even something minor. Something small like a clogged drain can easily lead to deeper damage later on, so open and honest communication is critical.

You should also have a stringent tenant screening process in place and, once a renter is found, clearly stipulate in the lease which maintenance tasks they’re responsible for. Do they need to trim the hedges and tree branches away from the home? Are they required to steam-clean the carpets once per year and clear out the air vents every month? Be specific.

Finally, never re-up a lease without seeing the property first. The longer it’s been since you’ve seen the home, the more damage there could be, so always do a quick walk-through before signing on that dotted line.

Fair wear and tear is expected; property damage is not. Want to make sure you can collect on that property damage should it occur? Have a comprehensive inspection process in place, and always photograph the property before and after a tenant occupies the space for proof. A detailed lease can also protect you (and your property), as can a healthy security deposit, required up front before move in.


Source: fool.com

These two North Carolina cities rank among top 10 in the world for quality of life


Two North Carolina cities offer some of the best quality-of-life amenities in the world, new rankings show.

Charlotte and Raleigh ranked among the top 10 in a study of factors that contribute to residents’ happiness, according to a 2020 index from the user-contributed database website Numbeo.

Raleigh snagged the higher spots, landing at No. 3 globally and No. 1 nationally, results show. The Queen City wasn’t too far behind, ranking eighth in the world and fourth in the United States.

So what led North Carolina’s cities to earn international acclaim?

Raleigh and Charlotte had high scores for climate, a category that gives weight to places with “moderate temperatures and low humidity and no other major weather condition which is usually not preferred by most people,” according to Numbeo.

The Tar Heel State’s biggest cities also got favorable ratings for purchasing power and the ability to afford housing based on family incomes, the results show.

The findings come after three Raleigh suburbs ranked among the best small cities in the United States, The


News & Observer reported in October. More recently, a real estate blog named the region one of the most attractive for millennials.

Numbeo says it came up with its recent rankings for 232 cities after using formulas to evaluate data related to prices, pollution, health care, traffic and safety.

In the United States, other cities that made it into the top 10 list were Madison, Wisconsin; Columbus, Ohio; and Austin, Texas, findings show.

Worldwide, the top quality-of-life ranking went to Canberra, Australia. The capital city of nearly 400,000 people is about 400 miles northeast of Melbourne.





Holding the Tenant Responsible for the Balance of the Lease

ask-the-attorneyThe Landlord Protection Agency®presents John Reno, Esq., a highly experienced Landlord – Tenant attorney based on Long Island, NY.

Q:  Dear Mr. Reno:

Thank you, Mr. Reno, for taking my question. Once an eviction takes place, what is the status of the Lease Agreement as it pertains to lost rent? Is the evicted tenant still liable for lost rent for the remaining months of the Lease?
Charles, California.

A: Yes, yes, yes, the tenant is liable for the remaining months- but there’s a catch: Once you re-rent, you no longer can claim damages for lost rent. So you have to wait until you re-rent so you know how much to sue for.

Legal Disclaimer
The Landlord Protection Agency’s “Ask the Attorney” column is for informational purposes only. The questions answered by Mr. Reno on this site do not constitute an attorney-client relationship and are not to be considered legal advice. Not all questions will be answered and some may appear in the LPA Q&A Forum.
The Landlord Protection Agency recommends that you seek legal advice before using any of the material offered on this web site, and makes no guarantee on the effectiveness, compliance with local laws or success of any of the material offered on this web site. The Landlord Protection Agency is not engaged in rendering legal advice.

Top Ten Outperforming Metro Markets Report

The National Association of REALTORS® identified the top metro areas for the next 3-5 years based on domestic migration, housing affordability for new residents, consistent job growth relative to the national average, population age structure, attractiveness for retirees and home price appreciation, among other variables.

In alphabetical order, the markets are:

  • Charleston, South Carolina
  • Charlotte, North Carolinatop-10
  • Colorado Springs, Colorado
  • Columbus, Ohio
  • Dallas-Fort Worth, Texas
  • Fort Collins, Colorado
  • Las Vegas, Nevada
  • Ogden, Utah
  • Raleigh-Durham-Chapel Hill, North Carolina
  • Tampa-St. Petersburg, Florida

“Some markets are clearly positioned for exceptional longer-term performance due to their relative housing affordability combined with solid local economic expansion,” said NAR’s Chief Economist Lawrence Yun. “Drawing new residents from other states will also further stimulate housing demand in these markets, but this will create upward price pressures as well, especially if demand is not met by increasing supply.”

NAR identified the top 10 metro areas based on a myriad of factors, including domestic migration, housing affordability for new residents, consistent job growth relative to the national average, population age structure, attractiveness for retirees and home price appreciation, among other variables.

“Potential buyers in these 10 markets will find conditions especially favorable to purchase a home going into the next decade,” said NAR President Vince Malta, broker at Malta & Co., Inc., in San Francisco, CA. “The dream of owning a home appears even more attainable for those who move to or are currently living in these markets.”

Strong job growth is one factor driving up prices in these markets, with payroll employment rising about 2.5% annually in the last three years, higher than the national rate of 1.6%. In Ogden, Las Vegas, Dallas, and Raleigh, job growth rose nearly 3%.1

Movers2 flock to these markets at higher rates than the average of the 100 largest U.S. metro areas. In Colorado Springs, recent movers accounted for 21% of the total population, followed by Fort Collins at 17% and Las Vegas at 16%. These areas attract various age groups. For example, 11% of the people who moved to Tampa were 65 years and older, while 54% of recent movers in Durham were between the ages of 18 and 34. 

In most of these metro areas, about half of recent movers who are renting can afford to buy a home in those respective markets when compared to the nation’s 100 largest metro areas. Homeownership rates in these markets are expected to increase due to the relative affordability.

To view NAR’s Top 10 Outperforming Markets report, visit https://www.nar.realtor/reports/top-ten-outperforming-metro-markets-report.

The National Association of Realtors® is America’s largest trade association, representing more than 1.4 million members involved in all aspects of the residential and commercial real estate industries.




12 Trouble Spots To Watch For When Renting Out Property

Renting out a property can be profitable, but there are a number of potential issuesDepositphotos_5177593_l-2015-300x200 to watch out for, including tenant troubles, property maintenance issues, vacancy costs, or even a failure to reach your overall investing goals.

In order to avoid problems, owners should be mindful of the things that can affect the rental value of their property—or their long-term peace of mind when it comes to a tenant. Below, 13 members of Forbes Real Estate Council share some of the most crucial elements that owners or property managers should focus on when renting out a home, as well as why those elements are so important. Here’s what they said:

1. Tenant Reference And Employment Checks

This should go without saying, however, too many landlords meet prospective tenants in person and trust them because they are nice and affable people. Unfortunately, not everyone has the best track record with their previous landlords and a lot of future pain can be saved by both asking for references and actually calling the previous landlords. – Colin Bogar, Property Passbook

2. Systems Failing And Things Breaking

Have a plan before things break and systems fail. Build relationships with plumbers, electricians, handymen, etc., creating a strong network of vendors that you can trust. Empower your tenants to get immediate help by having a list of approved vendors in a book you can leave at the property. If you manage multiple properties, you can use this as leverage with the vendors to secure better rates. – Katie Brown, Downtown Katie Brown, Realtor

3. Eviction Rights

Don’t rent to anyone you can’t evict. Who rents your home will make or break your rental income. If it is your friend, family or partner then when the time comes to make that decision of evicting, you won’t do it. Which means you don’t have a rental, you have a charitable contribution. Decide now if it is a rental or a charity and pick rental tenants only. – Joseph Edgar, TenantCloud

4. Realistic Rent Amounts

Check local rental listings to find out what you can realistically charge. If you want to find a good tenant, the rent must be comparable to the going market rate. – Beatrice de Jong, Open Listings (YC W15)

5. Local Laws

Landlords will be tempted to rent more space than is locally allowed, such as a finished basement that is not approved as a legal unit. Also, with Airbnb becoming popular for landlords, as well as a hot button issue for communities, knowing the specific laws and guidelines is crucial. Fines for these types of actions are very costly and will kill your profit. Short money could become a long problem. – Ralph DiBugnara, Home Qualified

6. Your Investing Goals

One thing many first-time landlords forget to do is define their investing goals. We certainly did this with our first rental property. We figured, as long as it was cash-flowing, we’d keep renting it out. However, we failed to take into account the appreciation and diminishing return on equity. Had we defined our investing goals up front, we could have grown our portfolio much more quickly. – Annie Dickerson, Goodegg Investments

7. If The Numbers Work

Before you get emotionally invested in the idea of converting your home into a rental, you have to run the numbers. Ask yourself: “If I was a real estate investor analyzing this property for potential purchase as a rental, do the numbers work?” A fundamental rule of sound rental property investing dictates that the rental should cash-flow from day one. Run the numbers and let them guide you. – Spencer Hilligoss, Madison Investing

8. Condition Of The Home’s Maintenance

In assisting a client with finding a rental property, you must consider the condition of the home’s maintenance. Whether a relocation getting a sense of the area or moving from an apartment, the rental experience can make or sour the client to an area, ownership and your service. Always inspect the HVAC and appliances, as dealing with them can be a hassle your client blames on you. – Blake Plumley,Capital Pursuits LLC

9. Getting Long-Term Tenants

Consider finding tenants that are interested in longer-term leases as this will save you time and money in the long run. Any property rented out will experience wear and tear, but you can avoid this annual cost if tenants are not moving out each year. Additionally, this will save you lost rent that comes with having a vacant property and the time it takes to find a new tenant. – Joshua Lybolt, Lifstyl Real Estate

10. Renters Insurance

I always make sure that the tenants who rent my clients’ properties have rental insurance coverage. This protects them in the event that something goes wrong during the tenancy. – Deborah Rabbino Bhatt,Vesta New York

11. Vacancy Costs

Remember that pricing a property at market rate helps you become cash flow positive sooner and lowers vacancy costs. Landlords often price their property above market rate to “see what you can get.” Starting your pricing too high actually lowers interest from renters. As your property stays on the market longer, it becomes stale and takes longer to rent. We’ve seen this increases vacancy costs. – Chuck Hattemer, Onerent

12. Property Inspection

Getting a property inspection prior to tenants moving in is always a good idea. It will help owners understand if there are any “hidden” issues within the home so that they can make repairs on them before they could snowball over time. This will hopefully prevent any potential injuries or late-night calls from the tenants and will give both parties peace of mind! – Brad Le, Compass

Source: forbes.com

Q&A: Why Do Property Managers Suck?



“Not meant to offend the property managers out there – I know the good ones exist. However, a common theme I’ve seen is how hard it is to find a good, reliable property manager that makes the money you spend on them worth it. So please share your stories of what has made you frustrated with your property manager (or what you’re looking for in a good one!)”




Good morning Jen  – It’s disappointing to see your troubles and I get exactly where you are coming from.  Property Management has a low barrier of entry and in some states, zero licensing.  It makes good property managers stand out even more.

I would also ask – from a previous post of mine – Are you a “C” Class Landlord?


In the property management industry managing single family and multi-family homes, we have classifications for Landlords that are never put on paper and probably never talked about.

This has probably never been published before, so here goes something new… If you are a Landlord, you may want to read this and see what classification YOU would fall into. If the description fits you – wear it.

If you are subjective about your dealings with your Property Manager, it could help foster a better relationship between you and your property manager getting you better service.

Class “A” Landlord:

  1. Hires a Property Manager and is glad to pay their fees understanding that they provide a valuable service assisting them in growing an asset.
  2. Appreciates their systems, procedures, tools, and level of separation they provide from their tenants. They understand their job is often difficult being the punching bag for both sides of a management transaction that can last for years.
  3. Allows them the flexibility to make tough decisions in a pinch on their behalf. (Spending $505 dollars for an AC repair in July when their spending limit is $500)
  4. Understands that the Property Manager is not responsible for everything that goes on with the home – to include the weather and the marketplace.
  5. Is easy to get in touch with and responds well to phone calls, emails, and even texts.
  6. Realizes that by having a property manager and paying $20/hour (example) – it allows them to find bigger deals and more investments making $2,000/hour for their time.
  7. These folks are full time, possibly part-time investors that have enough capital to back up their investments and truly understand that what they put out in management fees is far outweighed by appreciation and tax breaks. Simple depreciation is a monster and is often overlooked by a lesser class landlord.

Class “B” Landlord:

  1. Reluctantly hires a Property Manager after some minor effort to shop for the cheapest property manager they can find.
  2. Second guesses all repair items and laments about not having any money to cover large repairs.
  3. Often classified as “Reluctant Landlords” for never planning on having a rental home, but being thrust into the realm of owning one by an unexpected relocation.
  4. Wants two bids for every job in the effort to save $20.00 – not caring if the tenant goes without AC or hot water for several days.
  5. Does not understand basic accounting and needs a constant explanation for what the income/expense statement means.
  6. Is difficult to reach often not responding the same day for urgent matters.
  7. These folks are often reluctant landlords, first-time landlords, and intermediate landlords away for a year or two then moving back into their home.

Class “C” Landlord: 4

  1. Grudgingly hires a Property Manager because their CPA told them to do so.
  2. Shops high and low for the cheapest property manager in town – then asks them for a discount because they are an “investor”….. with their two homes.
  3. Is abusive to the property management staff requiring constant communication and taking the attitude “Don’t you know who I am?”.
  4. Introduces themselves to the tenant behind the Property Managers back – telling the tenant they can call them anytime if the Property Manager does not immediately answer their every need. (This creates a Mommy / Daddy issue. The PM says “NO – You can’t pay your rent late this month”….then the tenant runs to the Landlord telling them the PM said “We are evicting you AND taking away your birthday”)
  5. Wants three bids for EVERY repair – no matter the inconvenience to the tenant – no matter the headache to the property manager…all with the effort to save $5.00. (Sounds dramatic – but this is true!!! – seen it many times before!)
  6. Blames the Property Manager for wind, hail, storms, tornadoes, winter storms, freezing pipes, foundation movement, dead grass, etc… Essentially, nothing is ever beyond anyone’s control – it’s always the PM’s fault. This is a deeper reflection of that type of person never taking accountability for anything.
  7. Wants to sue everybody for….everything. Tenant did not water the grass last week, can we hire an attorney and sue them? You did not answer the phone on a Saturday if you don’t call me back and I will seek vengeance on you with my attorney!
  8. Leaves negative reviews online about a property manager. Hides behind Google and Yelp to feel better about their cyberbullying. If the landlord truly had a real issue – almost all property management companies are governed by several entities to include the state. Threatening to leave a negative review if you don’t get your way is blackmail and extortion. The same tactic the mafia has used for years….no different. If the Landlord has a real issue with the property manager – point 7 above may be needed. Leaving negative reviews on public forums is not productive for anyone.
  9. Is impossible to reach via phone/email. Then they respond at 10:00PM on a Saturday and is upset no one is available to speak with them at the time they finally call back.
  10. Will not reduce asking price in rent. If a home is vacant – with good marketing photos (and video) – and is being advertised fully…..here is a hint: IT’S THE ASKING PRICE! There are two things that rent homes – Price and Condition….and Price can make up for everything. The Landlord not willing to reduce their asking price at any cost is a flat out moron. If you want to do the math – assume your property rents for $1,000 a month. But, you aren’t getting it. What do you lose every month that the home is not rented? That’s right – $1,000. What do you lose every month if the home rents for $950? Well done – $50 / month or $600 a year. Which would you choose?
  11. Wants to do their own repairs. We have seen time and time again owners taking 6 months to do their own make-ready repairs spending several thousand dollars MORE to do it and losing 4-5 months in possible rent. I have seen the total swing to be $10,000 with several investors….all one can do is shake their heads at them.
  12. These folks are often first-time investors, overly dramatic reluctant landlords, emotionally attached to their homes and in often cases have an “I’m smarter and better than anyone else in the entire universe and I can do it all” attitude.

Ask yourself – which type of Landlord are you?


Study: Raleigh rental rate growth among highest in U.S.

Rents in Raleigh are up 3.6 percent over the past year, the 6th-fastest growth rate among the nation’s large cities, a new study from Apartment List says. For comparison, the national rent index grew by just 1.5 percent over the past year.Capture

For even more historical perspective, rents in Raleigh have risen by 17.4 percent since 2014, outpacing the national average of 12.7 percent, the study says.

But Raleigh’s median rental rate is still a relative bargain. The median rent for a two-bedroom apartment in the City of Oaks is currently $1,159, compared to the national average of $1,855.

This is the seventh straight month that the city has seen rent increases, after a decline in October of last year. Raleigh’s year-over-year rent growth is also above North Carolina’s average of 2.8 percent.

Throughout the past year, rent increases have been occurring not just in Raleigh, but across the entire state. Of the largest 10 cities that Apartment List has data for in North Carolina, all of them have seen prices rise.

Cary is the most expensive of all North Carolina’s major cities, with a median two-bedroom rent of $1,280. Of the 10 largest North Carolina cities that the report has data for, all have seen rents rise year-over-year, with Wilmington experiencing the fastest growth (up 4.7 percent).

The Apartment List report revealed Henderson, Nevada, had the highest year-over-year rent growth in the U.S., with an increase of 4.5 percent – nearly three times the national rate. Another North Carolina metro, Greensboro, ranked just behind Raleigh on the national list, with a rental rate growth of just under 3 percent. National rankings are based on cities with a population of at least 250,000.

Apartment List uses median rent statistics from the U.S. Census Bureau, then extrapolates them forward to the current month using a growth rate calculated from its listing data. The report uses a same-unit analysis similar to Case-Shiller’s approach, comparing only units that are available across both time periods to provide a picture of rent growth in cities across the country.

By   – Associate Editor, Triangle Business Journal


5 Ingredients of a Good Tenant

What 5 Ingredients Make Up a Good Tenant?

By John Nuzzolese

Most landlords try their best to select good tenants to occupy their rental properties. Some are very successful at it while others always seem to end up with bad tenants regardless of how much they try.

In order to find a good tenant, we need to first understand the qualities or ingredients that a good tenant is made up from. Once we understand what ingredients we are looking for, we can carefully screen applicants with the right ingredients in mind. The LPA has a few tools I’ve listed below that can help you determine if your applicant has the desired qualities you are looking for in your screening process.

So What Are the 5 Ingredients that Make Up a Good Tenant?

  1. Honesty / Integrity Trust… reliability… decency are qualities that come to mind when I think of a top quality tenant. I want a tenant who will do what he agrees to do. Someone who morally chooses to do the right thing. A person whose signature on a contract signifies a binding promise they will keep.
  2. Creditworthiness If I am going to give legal possession of a valuable piece of real property to a tenant, I’m going to first want to know I’m dealing with someone with a good track record concerning credit. We have the technology available now that can give me a credit report on the computer instantly on any rental prospect, so I definitely want to assure myself that my prospect deals with financial matters in a reputable way.
  3. Ability to Pay Does the tenant have sufficient income or other resources to easily pay the rent and other living expenses every month? Is the tenant employed or just independently wealthy? Does the tenant depend on any other parties to survive? The answers to these questions will tell you how secure this tenancy will be.
  4. Cleanliness A clean tenant has higher standards than a dirty tenant. It is a fact that clean tenant will care for your rental property better than a dirty tenant.
  5. Respect This is an important one. I have had the worst experiences with people who do not respect others. They may not even respect themselves, which usually means they won’t treat your property very well since they don’t respect it either. If they do not respect you as the landlord, you have a recipe for trouble.

Source: The Landlord Protection Agency, Inc.

10 Red Flag Questions from Tenants


After a while in the landlord business, showing rental properties to many tenants, you tend to hear some of the same questions and statements again and again. The screening process is alive from the moment you first speak with your new prospects until the leases are signed and the money is paid, so you must keep your eyes and ears open for clues and telltale signs of whether your prospect is the right tenant for your rental. Some of these questions can alert you if the tenant may be targeting you for a possible lawsuit concerning certain legal or housing issues.

10 Red Flag Questions or Statements that Should Worry You when Screening Tenants

  1. red-flag-logo-01

    “We can have my wife sign the lease. Her credit is OK.”

  2. “Why do you need our credit reports? That doesn’t tell you what good people we are.”
  3. “We’re moving because our landlord is a jerk.”
  4. “You won’t need a security deposit with us. We’ll take good care of your home.”
  5. “I’m an attorney and more than qualified to rent your house. By the way, I found 3 illegal questions in your rental application.”
  6. “Wait till you see the place when we’re done with it. You won’t recognize it.”
  7. “What is your policy concerning drugs?”
  8. “Are utilities included? I had a little dispute with the electric company.”
  9. “Do you declare your rental income on your taxes?”
  10. “Would you mind giving me the key so we can just put a few boxes in there today? I’ll have the money next week and we can sign the lease then.”

There are lots of “red flags” to watch for. What kind of “red flags” have you picked up in your landlord travels?

Source: The Landlord Protection Agency, Inc.